[Marxism] "Big Oil" clashed with "Neo-Cons" over scheme to privatize Iraq's oil reserves!

Duane Roberts duaneroberts92804 at yahoo.com
Sun Mar 20 01:22:05 MST 2005

Greg Palast, a prominent American journalist
who works for the BBC, is reporting that
he has uncovered evidence suggesting that a major
feud actually erupted between different factions
within the U.S. ruling class over the best way
of managing Iraq's oil reserves after Uncle
Sam liberated them from Saddam Hussein's tyrannical

According to Palast, U.S. petroleum companies
were greatly disturbed by the "Neo-Cons" repeated
insistence that all of Iraq's oil reserves be
rapidly sold off and "privatized". For what
reason, you may ask? So that virtually unlimited
quantities of Iraqi crude could be dumped on world
markets with the ultimate objective of busting the
OPEC cartel!

Palast writes that "Big Oil" realized the "Neo-Cons"
scheme to "privatize" Iraq's oil reserves would have
torpedoed all of their profits! Flooding
world markets with millions of barrels of cheap
Iraqi crude not only would have obliterated the
OPEC cartel, but the stock values of many "Big Oil"
companies as well! Low oil prices means low 

If Iraq's oil reserves were "privatized" in the
manner the "Neo-Cons" had envisioned, "Big Oil" would
be forced to operate in an incredibly hostile
environment where the market was glutted with cheap
Iraqi crude produced by dozens of low cost competitors
-- a nightmare scenario for U.S. petroleum companies
who have billions tied up in fields whose oil is much
more expensive to pump!

According to Palast, U.S. petroleum companies wanted
Iraq's oil reserves to remain under the control
of the state. Why is this? Because it prevents the
emergence of new companies not under their control who
might be inclined to flood world markets with cheap
Iraqi crude; and it increases the likelihood that
they'll get a bigger piece of the action from any
puppet regime Uncle Sam puts into power!


Duane J. Roberts
duaneroberts92804 at yahoo.com


BBC News

Published: 2005/03/17 15:41:31 GMT

Secret US plans for Iraq's oil

By Greg Palast
Reporting for Newsnight

The Bush administration made plans for war and for
Iraq's oil before the 9/11 attacks, sparking a policy
battle between neo-cons and Big Oil, BBC's Newsnight
has revealed.

Two years ago today - when President George Bush
announced US, British and Allied forces would begin to
bomb Baghdad - protesters claimed the US had a secret
plan for Iraq's oil once Saddam had been conquered.

In fact there were two conflicting plans, setting off
a hidden policy war between neo-conservatives at the
Pentagon, on one side, versus a combination of "Big
Oil" executives and US State Department "pragmatists".

"Big Oil" appears to have won. The latest plan,
obtained by Newsnight from the US State Department
was, we learned, drafted with the help of American oil
industry consultants.

Insiders told Newsnight that planning began "within
weeks" of Bush's first taking office in 2001, long
before the September 11th attack on the US.

An Iraqi-born oil industry consultant, Falah Aljibury,
says he took part in the secret meetings in
California, Washington and the Middle East. He
described a State Department plan for a forced coup

Mr Aljibury himself told Newsnight that he interviewed
potential successors to Saddam Hussein on behalf of
the Bush administration.

Secret sell-off plan

The industry-favoured plan was pushed aside by a
secret plan, drafted just before the invasion in 2003,
which called for the sell-off of all of Iraq's oil
fields. The new plan was crafted by neo-conservatives
intent on using Iraq's oil to destroy the Opec cartel
through massive increases in production above Opec

The sell-off was given the green light in a secret
meeting in London headed by Ahmed Chalabi shortly
after the US entered Baghdad, according to Robert

Mr Ebel, a former Energy and CIA oil analyst, now a
fellow at the Center for Strategic and International
Studies in Washington, told Newsnight he flew to the
London meeting at the request of the State Department.

Mr Aljibury, once Ronald Reagan's "back-channel" to
Saddam, claims that plans to sell off Iraq's oil,
pushed by the US-installed Governing Council in 2003,
helped instigate the insurgency and attacks on US and
British occupying forces.

"Insurgents used this, saying, 'Look, you're losing
your country, you're losing your resources to a bunch
of wealthy billionaires who want to take you over and
make your life miserable,'" said Mr Aljibury from his
home near San Francisco.

"We saw an increase in the bombing of oil facilities,
pipelines, built on the premise that privatisation is

Privatisation blocked by industry

Philip Carroll, the former CEO of Shell Oil USA who
took control of Iraq's oil production for the US
Government a month after the invasion, stalled the
sell-off scheme.

Mr Carroll told us he made it clear to Paul Bremer,
the US occupation chief who arrived in Iraq in May
2003, that: "There was to be no privatisation of Iraqi
oil resources or facilities while I was involved."

Ariel Cohen, of the neo-conservative Heritage
Foundation, told Newsnight that an opportunity had
been missed to privatise Iraq's oil fields.

He advocated the plan as a means to help the US defeat
Opec, and said America should have gone ahead with
what he called a "no-brainer" decision.

Mr Carroll hit back, telling Newsnight, "I would agree
with that statement. To privatize would be a
no-brainer. It would only be thought about by someone
with no brain."

New plans, obtained from the State Department by
Newsnight and Harper's Magazine under the US Freedom
of Information Act, called for creation of a
state-owned oil company favoured by the US oil
industry. It was completed in January 2004 under the
guidance of Amy Jaffe of the James Baker Institute in

Formerly US Secretary of State, Baker is now an
attorney representing Exxon-Mobil and the Saudi
Arabian government.

Questioned by Newsnight, Ms Jaffe said the oil
industry prefers state control of Iraq's oil over a
sell-off because it fears a repeat of Russia's energy
privatisation. In the wake of the collapse of the
Soviet Union, US oil companies were barred from
bidding for the reserves.

Ms Jaffe says US oil companies are not warm to any
plan that would undermine Opec and the current high
oil price: "I'm not sure that if I'm the chair of an
American company, and you put me on a lie detector
test, I would say high oil prices are bad for me or my

The former Shell oil boss agrees. In Houston, he told
Newsnight: "Many neo conservatives are people who have
certain ideological beliefs about markets, about
democracy, about this, that and the other.
International oil companies, without exception, are
very pragmatic commercial organizations. They don't
have a theology."

A State Department spokesman told Newsnight they
intended "to provide all possibilities to the Oil
Ministry of Iraq and advocate none".

Greg Palast's film - the result of a joint
investigation by Newsnight and Harper's Magazine -
will be broadcast on Thursday, 17 March, 2005.

Newsnight is broadcast every weekday at 10.30pm on BBC
Two in the UK.

View segments of Iraq oil plans at www.GregPalast.com

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