US Begins Secret Talks to Secure Iraq’s Oilfields

By Nick Paton Walsh in Moscow, Julian Borger in Washington, Terry Macalister and Ewen MacAskill, Guardian (UK), 23 January 2003

The US military has drawn up detailed plans to secure and protect Iraq’s oilfields to prevent a repeat of 1991 when President Saddam set Kuwait’s wells ablaze.

The US state department and Pentagon disclosed the preparations during a meeting in Washington before Christmas with members of the Iraqi opposition parties.

Iraq has the second biggest known oil reserves in the world producing, in their current run-down state, about 1.5m barrels a day. But experts contacted by the Guardian predict this could rise to 6m barrels a day within five years with the right investment and control.

At the meeting, on the future of a post-Saddam Iraq—details of which have been disclosed to the Guardian—the state department stressed that protection of the oilfields was issue number one.

One of those at the meeting said the military claimed that a plan to protect the multibillion oil wells was already in place, hinting that special forces will secure key installations at the start of any ground campaign.

As well as immediate concern about the environmental impact of having hundreds of Iraqi wells on fire, US, British, Russian, French and other international oil companies are already taking soundings about Iraq’s multibillion pound oil supply.

The companies are reluctant to mention oil in public, fearing it will feed Arab suspicion that it is the main factor in the confrontation with Iraq.

Yet, with war looming, discussions in private have inevitably begun on the future of the world’s second biggest oil reserves.

The US and British governments deny that oil is a factor in the confrontation with Iraq.

The Foreign Office minister, Mike O’Brien, said yesterday: The charge that our motive is greed—to control Iraq’s oil supply - is nonsense, pure and simple. It is not about greed: it is about fear [about the proliferation of weapons of mass destruction].

The US secretary of state, Colin Powell, told the Boston Globe yesterday: If there is a conflict with Iraq, the leader ship of the coalition [will] take control of Iraq. The oil of Iraq belongs to the Iraqi people. Whatever form of custodianship there is ... it will be held for and used for the people of Iraq. It will not be exploited for the United States’ own purpose.

Asked whether US companies would operate the oilfields, Mr Powell said: I don’t have an answer to that question. If we are the occupying power, it will be held for the benefit of the Iraqi people and it will be operated for the benefit of the Iraqi people.

There is a debate within the US administration over whether some of Iraq’s oil revenues might be used to cover part of the costs of occupation, which is expected to last 18 months.

The office of the vice-president, Dick Cheney, and some officials at the Pentagon have reportedly advocated commandeering revenues from the oilfields to pay for the daily costs of the occupation force until a democratic government can be installed. The state and justice departments, meanwhile, have insisted that the money be held in trust.

There are two competing needs here: the budgetary need for forces which will be extraordinary, and the need to get it up and running and show the Iraqi people some real results and some real improvement in life, said Andrew Krepinevich, a Pentagon adviser, whose organization, the Center for Strategic and Budgetary Assessments, carried out a study of the issue for the Pentagon.

The relationship between the oil industry and the US administration, from the president, George Bush, downwards, is the closest in American history.

The Wall Street Journal last week quoted oil industry officials saying that the Bush administration is eager to rehabilitate the Iraqi oil industry.

According to the officials, Mr Cheney’s staff held a meeting in October with Exxon Mobil Corporation, ChevronTexaco Corporation, ConcocoPhilips, Halliburton, but both the US administration and the companies deny it.

The BP chief executive, Lord Browne, said last year he was putting pressure on Mr Bush and Tony Blair not to allow a carve-up.

A Foreign Office source confirmed that the security of Iraq’s oilfields was of paramount concern.

That is something that is being assessed across Whitehall, said the source. But whether or not the Iraqis manning the wells will blow their future livelihood upon an order from Baghdad remains another issue. A lot of that will be about getting there first. The importance of preventing an environmental catastrophe is right up there.