Bush’s Pre-War Iraq Oil Deals Alarmed BP

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 to British 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 officials began 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…”

I explained in my book, Engaging the Muslim World,

why Blair’s assertion was untrue. The prime minister could not have done a deal with Saddam Hussein, because of US congressional sanctions on that country. Those sanctions, like the ones on Iran, were strongly backed by the American Israel Public Affairs Committee or AIPAC, among the most effective and powerful lobbies on Capitol Hill. They were intended to ensure that Iraq and Iran, oil states hostile to Israel with the wherewithal to build big armies and to acquire deadly weaponry, should remain weak and unable to benefit from their petroleum riches.

I pointed out that Dick Cheney, while heading up Halliburton in 1995-2000, had heavily lobbied Congress to stop imposing such sanctions, and had tried to convince it to restore good relations with Iran, so that US energy corporations could invest in its petroleum and gas. Cheney’s anti-sanctions efforts on the Hill crashed and burned, and he was unable to make any headway against AIPAC on that issue.

I argued that Cheney concluded that if you can’t beat them, you have to join them. He appears to have decided that there was only one way to open up Iraq and Iran to Western investment, which was to do regime change and install governments in Baghdad and Tehran that would be pro-American and at least not openly hostile or threatening to Israel. In this way, the anxieties of AIPAC could be allayed at the same time that the ambitions of Big Oil could be achieved. This old-time Arabist thus made an alliance with the Neoconservatives, who had in 1996 argued for regime change in Iraq, in a white paper for Israeli prime ministerial candidate Binyamin Netanyahu.

So what Blair was saying was wrong on two counts. First, it simply was not the case that Washington and London were free to do a deal with Saddam. The US congress’s AIPAC-backed sanctions regime, which would have been applied to BP if it had tried to go into Saddam’s Iraq, stood in the way of any such move. And second, that Blair had joined with Bush in an illegal war of aggression with no UNSC sanction and no justification under the United Nations Charter, because of the prospect of opening Iraqi fields to development by BP and Shell, was not “absurd.”

Blair has made on the order of $32 million since leaving office, through various consultancies. In 2007 he took BP executives with him to Libya where he arranged for an entree for it into that market, potentially worth $21 billion. That is why the current UN intervention in Libya is not a war for oil. They had the oil. Blair also promised military training to Qaddafi’s special forces.

Lady Symons was until last month an unpaid adviser to Libya’s National Economic Development Board; she quit when Qaddafi began sending tanks to shell urban rallies.

The documentation of BP’s negotiations with the Blair government on Iraqi petroleum suggests that researchers should look further into the role in the Iraq War of Big Oil in the United States. Though, since the US is now more of a plutocracy than Britain and US citizens now have fewer rights than UK citizens, we will not find it as easy to get to the bottom of it all.

27 Responses

  1. On the general topic of oil and war, readers may enjoy Robert Newman’s “History of Oil”. Though maybe enjoy isn’t quite the word, given the chilling message.

    As is often the case, sometimes it is to comedians that we have to turn for the most perceptive analysis.

  2. “Blair’s assertion was untrue. The prime minister could not have done a deal with Saddam Hussein, because of US congressional sanctions on that country. Those sanctions, like the ones on Iran, were strongly backed by the American Israel Public Affairs Committee or AIPAC, among the most effective and powerful lobbies on Capitol Hill. They were intended to ensure that Iraq and Iran, oil states hostile to Israel with the wherewithal to build big armies and to acquire deadly weaponry, should remain weak and unable to benefit from their petroleum riches.

    I pointed out that Dick Cheney, while heading up Halliburton in 1995-2000, had heavily lobbied Congress to stop imposing such sanctions, and had tried to convince it to restore good relations with Iran, so that US energy corporations could invest in its petroleum and gas. Cheney’s anti-sanctions efforts on the Hill crashed and burned, and he was unable to make any headway against AIPAC on that issue.

    I argued that Cheney concluded that if you can’t beat them, you have to join them. He appears to have decided that there was only one way to open up Iraq and Iraq to Western investment, which was to do regime change and install governments in Baghdad and Tehran that would be pro-American and at least not openly hostile or threatening to Israel. In this way, the anxieties of AIPAC could be allayed at the same time that the ambitions of Big Oil could be achieved.”

    Wait, so big oil (one of the most powerful and profitable industries in all of history) has basically no power to get its way in the United States government if what they want is opposed by AIPAC? I know for a fact that there were other oil companies lobbying the USG for opening up Iraqi oil fields to them, so I assume that a large amount of pressure from the industry as a whole was brought to bear to push for their interests in Iraq? And you’re saying that this incredibly powerful, well-connected, rich and strategically vital industry was blocked in its efforts by AIPAC?

    That doesn’t make much sense if you ask me.

  3. Imagine trying to cut the world’s use of coal/oil/gas (from concern for greenhouse gas emission) when the great powers (USA, UK, BP, EXXON, and similar) are so determined to continue this madness that they were willing to engage in a $1T war (Iraq) to further their own (private and narrowly political) ends.

    The strangle-hold that the big corporations have on world politics would not be so bad if the corporations only had something like a leaven of good sense or good intention. (Democracy is so imperfect that oligarchic control could, in principle, be an improvement).

    But nothing suggests that the big corporate interests are capable of entertaining a thought relating to the “general good”, be it deficit reduction, mild-normal-environmental-protection, or horrendous-environmental-disaster-prevention (global warming, maybe BP’s various big oil spills).

    We live in a world of 1000-lb gorillas (the corporations, the politicians) which appear to have no more than the moral capacity of a butterfly between them.

  4. we will not find it as easy to get to the bottom of it all.

    I’m not sure why this is a problem, it’s how Govt./Corp. Amerika operates not only in this war but every war. It has nothing to do with helping the citizens of said nations, only what minerals do they have and how many do we need to round up/kill to get to them. What pay for them, don’t make laugh/cry. 0 brought just more hopey/changey to the world or as the other story says, the govt. has no rules to follow. Big bother is watching.

  5. On the general topic of oil and war, readers may enjoy Robert Newman’s “History of Oil”.

  6. Wasn’t part of the original Pentagon plan just after the invasion of Iraq to secure the oil fields?
    If so, Bush did have a plan, but it didn’t work.
    The meme that Bush had no plan after the invasion alwas seemed not true to me. It was about the oil, not democracy.
    How will this play out for Blair in Britian. Will there be any legal action against him?

    • They secured the fields (which would suffer irreparable geological damage if set alight) but allowed the Iraqi infrastructure to be comprehensively looted.

      So protect the oil (US wants it) but get rid of the Iraqi facilities (US wants them out of the way). One of the other docs I reveal shows Pentagon planners concerned that to repair the infrastructure would weaken the arguments for foreign investment!

      As for Blair, we had a TV comedy drama over here just before he left office, called the Trial of Tony Blair. It was very funny and well-made, but also hugely enjoyable because the prospect of him being locked up for war crimes was immensely satisfying, even a relief. Sadly there’s no prospect of it in reality.

      • I find the idea of Pentagon planners who think that bad infrastructure entices foreign investment a little hard to swallow. Exactly which document shows this?

        • Hi, Daniel, sorry I’m getting a bit ahead of myself here. I’ve given that doc to another journalist as an exclusive, but it’ll be out in the next few days. Contact me through http://www.fuelonthefire.com and I’ll get back to you as soon as it’s out.

          But just to clarify: the point was that if Iraqi wells, flow stations, pipelines etc were in terrible condition, the Iraqis might need foreign companies to come in and rebuild them.

    • “If so, Bush did have a plan, but it didn’t work.”

      Let’s not forget the sorry spectacle of Ahmed Chalabi and a couple hundred mercenaries being flown into Iraq and staged as a de Gaulle returning to Paris parade.

      That was the plan – our little stooge, The George Washington of Iraq, was going to be greeted with flowers, be set up as strongman, and run the country as a good little satellite state.

      As it turned out, Iraq in 2003 isn’t actually Honduras in the 1950s.

  7. [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…”]

    Now that Blair does not play a major role, his true character may get forgotten by those who did not track the Iraqi war attentively.

    Putting long story short, Blair is a live definition of pro-war demagoguery. Taking anything he says about the Iraqi war seriously is really misleading.

  8. On the negotiations with France and Russia:
    If I am not misremembering, Total and Gazprom had been signing contracts with Hussein during the 90s for oil to be drilled after the sanctions were lifted. Presumably this was a subject of the negotiations, and also a reason why the two countries refused to support the war.

    • Chinese and Russian (Lukoil not Gazprom) companies had signed with Saddam; Total had agreed terms but not signed. No doubt those contracts were a strategic factor (though not the only one) in those 3 countries’ decision not to support the US/UK war.

      Interestingly, Shell also negotiated with Saddam – a fact it doesn’t draw much attention to these days! At the time in the 1990s, Shell referred to the country as “East Jordan”, which also probably wouldn’t go down very well in Iraq…

  9. I agree – that was precisely the companies’ fear, that US companies would automatically get a piece, and that Russian, French and Chinese would get theirs as a bargaining chip. One part of the documents I found quite amusing was that at one stage the companies said for god’s sake don’t let it go to the French (ie Total) – anyone but the French… So the companies’ euphemism was that they wanted a ‘level playing field’ – but only between US and UK companies. It was an echo of the US’ Open Door Policy after the 1st World War – the door should be open, and the playing field level, only to companies of certain nationalities.

    One minor correction, Juan. This may have been unclear in the Indy, but I got >1,000 docs on Iraqi oil issues from the whole period 2000-2010 (not just prewar), and I use them (and interviews etc) to tell the full story of what happened. I gave the Indy 5 of the docs for yesterday’s piece, and another 4 for today’s.

    Anyway, great blog.

    I’m going to start posting the documents on my website. tommorrow insh’allah. Finally, just to let you know that although Fuel on the Fire is out this week in Britain, Ireland and India, it won’t be out in the USA for a few months.

  10. Excrpt from Wash Post article about Libya reveals similar mindset:

    “It is bizarre to suggest that NATO and the rest of the world lacks the capacity to deal with Libya — it does not,” Biden said. “Occasionally other countries lack the will, but this is not about capacity.” He said that U.S. efforts were better concentrated on Egypt.
    “Should we be spending more time knowing everything there is to know about the make-up of the opposition in Libya,” or should the United States be devoting its efforts to “what’s going on in Egypt and the Muslim Brotherhood?” Biden said. “It’s not even close.”

    Pardon the loose connection, but Biden’s words on Egypt have the same “it’s not about them, it’s about us” feel as the Iraq oil theft. Just what efforts are we devoting to Egypt and the Muslim brotherhood. My guess is, that like in Iraq, we want to control the outcome so it is favorable to our “interests”. The Muslim Brotherhood is our on location boogey-man.

    • That’s great, except for a few “minor” problems:

      1. The piece you linked to doesn’t discuss oil.

      2. We sided with the Muslim Brotherhood, and against our old ally Mubarak, in Egypt, greasing the skids for his departure and helping to pry the military away from him, in order to help the popular coalition, which included the Muslim Brotherhood, throw out a cooperative government and open the door to a great unknown.

      3. Kadhaffy was happily selling his oil to the west, and it was the rebellion that interrupted the party – the rebellion we backed and prevented from being wiped out, thus extending the period of oil interruptions and setting off the current price spike in the United States.

      • I agree with the intervention, but don’t you think that allowing Q to massacre Benghazi would have moved the international community to put oil sanctions on Libya, which would be against the interests of the coalition nations?

  11. Just think, during the time when all the talk in 2001 about exporting democracy and why do they hate us – they hate us for our freedoms, the real, behind the scenes issue was which oil company was going to get all that cheap oil. Ha! Apparently none of the above.

    Now, to bring it all home, the NASCAR set, those God fearing (Southern, white, non-Allah god fearing) Christians (southern, white, only certain denominations) who supported the war when crude was $30/bbl now have to put up with $4/gallon gasoline. This is causing much weeping and gnashing of teeth here in the states, but wait, it could get worse.

    What if the price of petrol got so high it seriously interfered with NASCAR? Now *that* would be a national tragedy.

  12. Anyone who doesn’t believe that the colonial powers are having the same discussions over Libya’s oil is deluded.

    • Gadaffi was happily selling his oil to the west, and western oil companies were making a fortune in his fields. It was the rebellion that interrupted this little arrangement, and all we had to do to keep the party going was to politely avert our eyes while the oil dictator slaughtered his opposition, as we’ve done so many times before.

      Instead, we backed the very rebellion that has spoiled the party, and are doing so in a manner that has kept the disruption going for weeks on end. We did this, immediately after having helped grease the skids for the removal of reliable American allies in Egypt and Tunisia.

      But it’s gotta be all about oil, because by definition, it’s gotta be, facts be damned.

  13. Joe, you make a good point about political reductionism, which is a trap we should be careful to avoid. Governments are not monolithic, nor omnipotent.

    I don’t think oil was the ONLY reason for the war in Iraq either – but it was the most important one. When Western powers look at the Middle East, they can’t help but to see through a lens of oil, despite their claims (which they most likely actually believe) to the contrary. Why else are they so sensitised to humanitarian issues or security threats there, compared to those in the rest of the world?

    One of the arguments I make in Fuel on the Fire is that the oil agenda was never as simple as to physically ‘take the oil’ (a la Donald Trump). And while governments were concerned to ensure their own companies got a share of the spoils (as in the prewar documents above), that was a secondary (and complementary) aim. The primary strategic issue was to expand global oil production through foreign investment, so as to keep the long-term oil price down. So far of course they haven’t done very well at that, but they are hopeful that the current contracts in Iraq will deliver.

    The rationale of military intervention in Libya is more complex than in Iraq. Certainly embarrassment at being on the wrong side in Tunisia (Sarkozy) and Egypt (Obama) was a factor. But there was also an oil issue, which was that many of the oilfields lie around the centre/north of the country. So, one argument goes, a strategic issue was that if the pro- and anti-Gaddafi forces were evenly matched, the front line of the war might continually pass across those fields, disrupting their production and pushing the price up. Hence intervening on one side.

    This is a more short-term oil price concern than was at play in Iraq, which was over long-term production capacity. Indeed, things happened very quickly in Libya, compared to the Iraq war, which its advocates had called for for years.

    In short, I think the one view that’s more far-fetched than “it’s ALL about oil” is that it has “literally NOTHING to do with oil” (Rumsfeld).

    Juan, apologies for rather hijacking this comments board.

    • “The rationale of military intervention in Libya is more complex than in Iraq. Certainly embarrassment at being on the wrong side in Tunisia (Sarkozy) and Egypt (Obama) was a factor. But there was also an oil issue, which was that many of the oilfields lie around the centre/north of the country. So, one argument goes, a strategic issue was that if the pro- and anti-Gaddafi forces were evenly matched, the front line of the war might continually pass across those fields, disrupting their production and pushing the price up. Hence intervening on one side.”

      If this concern about a lingering conflict through the oil-producing centre of Libya was the primary concern as you suggest it could be, then helping the rebels is pretty much the worst thing to do. The best way to ensure that kind of conflict did not happen was to let Gaddafi retake Benghazi and the East, as most predicted he would. Before the NATO intervention, the rebels and Gaddafi were NOT evenly matched. Gadaffi was much stronger. There is something approaching parity in strength only now that the rebels have the might of NATO off the coast and in the skies above them.

      The strategic interests you mention there would suggest that hanging-wringing and strong words but no action, rather than intervention, would have been the best course of action for Western governments. Intervention has caused, predictably, exactly the kind of situation that theory has Western governments trying to avoid.

      • That said, I’m also not a Rumsfeldite who thinks it has NOTHING to do with oil. I honestly have very little idea what the strategic thinking is behind the intervention. I don’t think anyone really does right now apart from the people in government involved in strategic planning. I wouldn’t be surprised if we never know what the true strategic interests are, or if we only find out what the interests are when archives are cracked open in 30 or 50 years time.

      • Mr D, I agree that there is now rough parity (maybe a slight advantage for anti-Gadaffi) since NATO’s intervention. I referred to stalemate because I was thinking the no-fly zone came when the Libyan pilots and other military officials were defecting, which suggested a wobbling regime. I’ve rechecked the sequence of events and discovered I mis-remembered – the Gadaffi counter-offensive was in full swing by that time. Apologies. I haven’t found time to write a blog post about all this yet, but I stand corrected on the order of events.

        On the other hand, revolutions and civil wars are by their nature unpredictable, and this may be why they were concerned about longer-term stability.

        By the way, I said oil price was *a* strategic issue in Libya, not ‘the primary concern’ (in contrast to Iraq). As we’ve seen this week, refugees were a strategic issue too for the European governments (in a rather disgusting way – freedom’s ok, but don’t come here when you get attacked).

        Support for my view that oil price was a strategic issue came a couple of weeks back from UK Foreign Secretary William Hague, who said in an interview with the Sunday Times that:
        Libya is a pivotal state for Britain and Europe. Further unrest in north Africa would create a wave of unwanted immigration, new breeding grounds for terrorists and, most importantly, have “terrible economic consequences [for] the price of oil”, he says. “We can’t stand aside”. Other trouble spots are therefore not so much of a concern: the Ivory Coast, for example.
        (link to thesundaytimes.co.uk, paywall unfortunately but contact me via http://www.fuelonthefire.com for more details)

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