BP, Iraq & Oil

George W. Bush was quietly approaching US petroleum corporations and trying to do deals with the French and Russian governments and their energy companies regarding Iraqi petroleum fields in fall of 2002, according toBritish government documents. BP learned of these secret negotiations, and arranged for Prime Minister Tony Blair’s Trade Minister, Lady Elizabeth Symons, to lobby Bush on behalf of BP, which was afraid of being “locked out” of the Iraqi fields after the war.

The anxieties were palpable in a memo written by Edward Chaplin, director of the Middle East department at the Foreign Office, in October of 2002, after a meeting with the companies: “Shell and BP could not afford not to have a stake in [Iraq] for the sake of their long-term future… We were determined to get a fair slice of the action for UK companies in a post-Saddam Iraq.”

After a meeting with BP executives at the Foreign Office on 6 November 2002 to discuss the situation in post-war Iraq, an FO official wrote, “Iraq is the big oil prospect. BP is desperate to get in there and anxious that political deals should not deny them the opportunity.”

Symons tried to reassure BP that she believed it would be given Iraq concessions as a reward for Britain joining in the Iraq War, which proves that Blair was already committed to the war, despite his denials at that time. She pledged to “report back to the companies before Christmas” on the lobbying.

The British daily, The Independent, has been given 1,000 documents detailing talks between the British government and oil companies such as BP and Shell in fall of 2002 about their share in Iraqi petroleum. The memoranda were gained through Freedom of Information requests over five years by the activist Greg Muttitt, who has a book forthcoming. The documents flatly contradict denials 1) by Shell that its representatives met with the Blair government on Iraq at that time; 2) by BP that it had “no strategic interest” in Iraqi petroleum, and 3) by Tony Blair himself that it was a “conspiracy theory” that he was interested in Iraq’s petroleum as a motive for war.

In every decade since the 1950s, fewer and fewer big new petroleum fields have been discovered. Companies such as BP and Exxon-Mobil are desperate for new fields to exploit and fearful for the future if global oil production has peaked or is about to do so. Iran and Iraq hold most of the likely big reserves of unexploited oil known or suspected to exist in relatively easy-to-get-at regions.

It seems an odd accusation that the Bush White House was reaching out to Jacques Chirac and Total SA, and to Vladimir Putin and Gazprom Lukoil in fall of 2002 but cutting the British out.

Since we know from Symons that Blair was already committed to the Iraq War in fall of 2002, the most likely conclusion is that the Bush team was taking the British for granted and felt it more urgent to dangle the Iraqi oil fields before Chirac and Putin as an enticement to them to support a United Nations Security Council resolution authorizing the war. In this scenario, BP was being a little paranoid about being cut out of these deals; they just were not at that time a front-burner negotiating partner because London was felt already to be on board. But they appear to have feared that Bush would give the show away to France and Russia to get them on board, leaving slim pickings for BP.

In the end, of course, Chirac and Putin declined to be bribed by Bush in that way, leaving Washington with only Britain as an invasion partner, which did in fact set BP up to do very handsomely in nailing down Iraq petroleum concessions.

As soon as Iraq had been occupied, in spring, 2003, British officialsbegan strategizing how to insert corporations such as BP into an “open” Iraqi oil market without appearing “gratuitously exploitative,” according to The Independent today. I suppose being exploitative was O.K., just as long as the UK was not being unnecessarily so.

After 2003, half of Iraq’s estimated 115 billion barrels in reserves have been optioned by major Western petroleum corporations through the Iraqi ministry of petroleum, headed by Hussein Shahristani, a Shiite member of the State of Law coalition of Prime Minister Nouri al-Maliki, who, as an exiled activist of the Da`wa or Islamic Mission Party, had signed on to the Pentagon plan to overthrow Saddam Hussein in 2002.

Blair said in February of 2003 on the eve of war,

“Let me just deal with the oil thing because… the oil conspiracy theory is honestly one of the most absurd when you analyse it. The fact is that, if the oil that Iraq has were our concern, I mean we could probably cut a deal with Saddam tomorrow in relation to the oil. It’s not the oil that is the issue, it is the weapons…”