Oil Laws: Colonizing Iraq’s Economic Prize

An Equitable Sharing of Resources?

We are led to believe that Western societies are free and open. In many respects this is true: freedom of speech and the right to protest still exist, albeit within ever-tighter constraints. At root, however, much of what we see and hear in the corporate media has been shaped by money, power and greed. What passes for vibrant public debate is often a sham.

Some media professionals are aware of this, but they keep their heads down and stick to the narrow job requirements demanded of them. But many journalists cannot, or will not, grasp the notion that there are serious limits to news reporting and debate; limits that are set by powerful interests in society. The very possibility is viewed as an affront to journalistic pride and hard-bitten common sense.

A few journalists, however, are very well aware of the boundaries. They consciously seek to exploit occasional gaps in the corporate news blanket smothering reality, and to point the public to facts and perspectives that discomfit the powerful.

The issue of Iraq’s oil illustrates the standard problem: incessant repetition of a state-approved script, with tiny instances of solidly critical reporting. Discussion of any possible relationship between the invasion of Iraq and the US-UK thirst for oil – both as a hydrocarbon resource and as a strategic tool for dominance – is close to taboo. If raised, the topic is swiftly dismissed as ‘conspiracy’ talk.

It was only last month that news media reported the bombshell dropped by Alan Greenspan, former head of the US Federal Reserve:

“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” (Bob Woodward, “Greenspan Is Critical Of Bush in Memoir,” Washington Post, September 15, 2007)

After that remarkable line from his new book was made public, Greenspan rapidly backtracked. He “clarified” that he was talking about “security” and that oil was “not […] the administration’s motive.” (Bob Woodward, “Greenspan: Ouster Of Hussein Crucial For Oil Security,” Washington Post, September 17, 2007). The media’s attention has since moved away from such dangerous ground. Instead, safe territory on Iraqi oil is defined by terms such as ‘investment’, ‘stability’, ‘reconciliation’ and ‘equitable sharing of resources.’

The basis for such discourse was established before the invasion in 2003, when we were relentlessly told that Saddam’s weapons of mass destruction had to be rooted out and ‘stability’ brought to the region. The doctrine of reconciliation and democracy was reaffirmed when George Bush gave a speech in January 2007 in which he set out ‘benchmarks’ to measure Iraq’s ‘progress’. Bush proclaimed a noble aim for the Iraqi government, with US support:

“To give every Iraqi citizen a stake in the country’s economy, Iraq will pass legislation to share oil revenues among all Iraqis.”

Bush also pledged that: “military and civilian experts [will] help local Iraqi communities pursue reconciliation, strengthen the moderates and speed the transition to Iraqi self-reliance. And Secretary [Condoleezza] Rice will soon appoint a reconstruction coordinator in Baghdad to ensure better results for economic assistance being spent in Iraq.” (“‘The Most Urgent Priority for Success in Iraq Is Security,’ Bush Says,” New York Times, January 11, 2007)

Thus, the approved framework of oil revenue ‘sharing’, underpinning Washington’s ‘reconciliation’ among Iraqis, was decreed by the US president. And indeed this is the line followed in the bulk of corporate news reporting. Consider the following typical examples.

A Financial Times editorial hails a “national reconciliation package” to include “a law governing the country’s oil and gas industry” and “directed at […] discord between Iraq ‘s ethnic and confessional groups.” (Leader, “The irreconcilable. As deadlines pass, time is running out for a political solution in Iraq,” Financial Times, June 7, 2007)

The Times notes the guiding “principle that all oil revenues should be divided between the Iraqi regions”. (Carl Mortished, “Western oil major’s bid marks breakthrough for troubled Iraqi industry,” The Times, August 23, 2007)

Ian Black, Middle East editor of the Guardian, writes of a raft of measures designed to tackle Iraqi debt relief. These include “a revenue-sharing oil law”, drafted with the help of that well-known benefactor, the World Bank. (Black, “Rice breaks the ice with Syria , but not Iran,” The Guardian, May 4, 2007)

The ‘anti-war’ Independent writes of “redistributing the cash [oil revenues] to the regions – which the new oil law states must be done in proportion to regions’ populations.” (Saeed Shah, “Foreign companies in scramble for 10 new Kurdish oil contracts,” The Independent, March 23, 2007)

Steve Negus, Iraq correspondent of the Financial Times, even makes the classic journalistic mistake of taking government “hopes” at face value:

“The US hopes the oil law will reassure Sunnis that they will still receive a solid share of national oil export revenues under a new political order dominated by the Shia majority.” (Negus, “Iraqis try to curb pressure on US to quit,” Financial Times, September 10, 2007)

To date, no oil law has been approved by the Iraqi parliament despite extraordinary pressure from the US and UK governments. Sticking to the approved line, the FT’s Andrew Ward writes of “oil revenues . . . being distributed equitably to the provinces, in spite of the failure to pass a national oil law”. (Ward, “Little political progress, White House admits,” Financial Times, September 15, 2007)

The Reality On — And Under — The Ground

Contradicting the thrust of the above mainstream version of events, PLATFORM, a London-based human rights group monitoring the oil industry, argues that the oil law “has been wrongly described as providing a mechanism for sharing revenue among Iraq’s sectarian groups; in fact, this law does not deal with that issue, which will be the subject of a separate law, not yet drafted.” (PLATFORM, “The Iraqi oil sector, privatization and the UK’s role,” Submission to the Iraq Commission, 14 June 2007 — our emphasis)

PLATFORM activist Eva Jasiewicz told us:

“The mainstream media, with few exceptions, has uncritically reproduced White House and Foreign Office propaganda over Iraqi oil policy. The reporting has not been lazy; it has actively colluded in the repeated circulation of US-UK lies over revenue sharing, oil for peace and reconciliation as the goals of the law.” (E-mail to Media Lens, October 9, 2007)

Jasiewicz continued:

“The story of the corporate colonization of Iraq’s oil, and potential dismemberment of the country under a brutal military occupation, has been disappeared from the news agenda. Reporters ignoring the political and economic realities at stake in Iraq are guilty of deception and of promoting the neoliberal agenda of economic takeover of Iraq.”

The Federation of Oil Unions, the largest trade union in the Iraqi oil sector with over 26,000 members, also starkly challenges the media message of “reconciliation”:

“Depending on how it is applied, the current draft of the law could increase poverty, undermine state institutions and worsen the conflict in Iraq.” (PLATFORM, op. cit.)

In reality, Orwellian-named ‘production sharing agreements’ are being prepared which would hand over the lead role in the development of oil resources to corporations under highly-profitable contracts of up to 30 years. Unsurprisingly, this has been met with considerable opposition in Iraq. In response, the ‘production sharing’ terminology has been dropped from later drafts of the law. But as Kamil Mahdi, an economist at the University of Essex warns, “the content remains the same.” (Mahdi, “No law for oil,” Red Pepper, August 2007)

Such lucrative contracts are being sought by US-allied sectarian and political blocks within Iraq, all maneuvering to gain control of Iraqi politics and state institutions. Mahdi warns that the likely outcome is that “the majority of Iraq’s oil resources are to be surreptitiously privatized and handed over to multinationals under the guise of decentralization and benefit-sharing.” The draft law stipulates a “bizarre resource management arrangement” that will have Iraq’s regions scrambling over each other in a desperate race to award oil contracts to corporations. Any actual benefits will be reserved for “corrupt local elites and the multinationals themselves.”

Mahdi adds:

“The weak, sectarian and fractious Maliki government has proved to be just what the US needs at this time: one that is willing to acquiesce in US military offensives and to pursue the handover of oil to the multinationals, while at the same time applying the harsh economic policies dictated by the IMF, particularly over the domestic price of fuel.” (Ibid.)

The UK government has played a key role by boosting the lobbying efforts of oil multinationals. Six of these oil companies collectively appointed lobbyists, the International Tax & Investment Centre (ITIC), to push for Iraqi resources to be opened up to long-term oil production contracts. ITIC was even advised by UK Foreign Office and Treasury officials on how best to influence Iraqi decision-makers.

Moreover, the main ITIC lobbying document, “Petroleum and Iraq’s Future,” was sent to the Iraqi finance minister in late 2004 by the British ambassador to Iraq. ITIC says that the ambassador ‘formally’ submitted it to the Iraqi minister, implying UK endorsement of its contents. A diplomat from the British embassy played a key role in organizing a meeting of ITIC and its six corporate sponsors with Iraqi ministers and officials in January 2005.

Since the first draft of the oil law was completed in July 2006, British officials in both Whitehall and Baghdad have actively worked on the law. It was first seen by British officials at that time, fully eight months before it was seen by members of the Iraqi parliament in March 2007. (See PLATFORM, op. cit.)

This scandal has barely caused a ripple across the corporate media.

Progress Is Needed Soon!

A rare exception hinting at the truth about Iraqi oil was an Associated Press report in March 2007, which described “close associates” of Prime Minister Nouri al-Maliki expressing “fears the Americans will torpedo his government if parliament does not pass a law to fairly [sic] divvy up the country’s oil wealth among Iraqis.” American officials also made it clear to the “hardline” Iraqi prime minister “that they want an Iraqi government in place by year’s end acceptable to the country’s Sunni Arab neighbors, particularly Saudi Arabia, Jordan and Egypt.” The message from the Americans was stark and left al-Maliki “convinced he would not survive in power without U.S. support.” (Steven R. Hurst, “Iraqi Leader Fears Ouster Over Oil Money,” Associated Press, March 14, 2007)

Then, in June 2007, a news story appeared at the top of the front page of the New York Times:

“U.S. Warns Iraq That Progress Is Needed Soon”.

Admiral William J. Fallon, the leading American military commander for the Middle East, warned al-Maliki “in a closed-door conversation” of the pressing need for the Iraqi government “to make tangible political progress . . . to counter the growing tide of opposition to the war in Congress.” A major milestone of this “progress” is “to complete a law on the division of oil proceeds.” Clearly frustrated by Iraqi intransigence, Fallon warned al-Maliki: “You have the power. You should take the initiative.” (Michael R. Gordon, “U.S. Warns Iraq That Progress Is Needed Soon,” New York Times, June 12, 2007)

Michael Gordon, Pentagon correspondent for the New York Times, had been invited to sit in on this “closed-door conversation”. Gordon stated candidly that, “it was only at the end of the meeting that American officials agreed that it could be on the record.” In other words, as columnist David Broder noted, the NYT’s Pentagon correspondent was invited by the US commander to sit in on “what would normally be a private meeting.” The signal to the Iraqi Prime Minister was obvious: not only will you be pressured by the Americans to “make progress”, but the pressure will be boosted by publicizing it globally via the front page of the NYT.

Broder added:

“From an administration known for its secrecy, this deviation means only one thing: So desperate is the need to push Maliki into action that even the [New York] Times becomes a lever.” (Broder, “Failure on Two Fronts,” Washington Post, June 17, 2007)

This bullying behaviour is, of course, standard for Washington and well documented (see, for example, Noam Chomsky, Failed States, Hamish Hamilton, London, 2006).

“I Trust This Meets With Your Approval”: An Exchange With The BBC

On September 6, a piece by BBC business reporter Robert Plummer, ‘Little progress on halting Iraq’s decay’, appeared on the BBC news online website.

Plummer amplified the standard US doctrine:

“Now the US wants Iraq to pass an oil law as a means of promoting reconciliation among different religious and ethnic groups.”

We e-mailed him:

“What evidence do you have that the US administration desires the oil law ‘as a means of promoting reconciliation’? Surely you would agree that is rather different from reporting that the US claims that is their aim?”

We pointed out to Plummer that PLATFORM argues that the “law has been wrongly described as providing a mechanism for sharing revenue among Iraq’s sectarian groups; in fact, this law does not deal with that issue, which will be the subject of a separate law, not yet drafted.” (PLATFORM, op. cit.)

We also reminded him that there is considerable concern that the proposed oil law would benefit western (and other) corporations at the expense of the Iraqis themselves. We asked him why he had marginalized, indeed ignored, such valid perspectives. Within minutes, we received the following reply:

“When someone has written a piece about one subject, it seems a bit perverse to write asking why it wasn’t about an entirely different subject. I didn’t set out to write about the rights and wrongs of the Iraqi oil law — I wrote about reconstruction and why it’s costing so much money.

“I didn’t ‘marginalise’ or ‘ignore’ anyone’s arguments. I simply mentioned the oil law in passing, in a necessarily brief fashion, because it was peripheral to my theme.

“The ‘oil law’ in my piece was shorthand for the whole mass of oil-related legislation that is in prospect in Iraq . I’m well aware that there are in fact four proposed interlocking bills, only one of which has been drafted. I just thought that only a lawyer would be interested in that level of detail.

“I’m sorry I didn’t write the piece you clearly wanted to read — perhaps we can do that at a later date.” (E-mail from Robert Plummer, September 7, 2007)

It is apparently a matter of “detail”, that “only a lawyer would be interested in,” that legal measures for oil revenue ‘sharing’ have yet to be drafted. Regular readers will be familiar with this standard plea by professional journalists that there is ‘insufficient space.’

In our reply, we pressed the point that Plummer had still not addressed:

“What evidence do you have that the US administration desires the oil law ‘as a means of promoting reconciliation’? You haven’t answered that point in your reply. I provided you with the reference to PLATFORM because there is substantial evidence that the oil legislation is about conquest, not reconciliation.” (E-mail to Robert Plummer, September 7, 2007)

We received a final response:

“Never let it be said that we ignore the views of our readers. I have now amended the sentence in question to read: ‘Now the US wants Iraq to pass an oil law, as what it says is a means of promoting reconciliation among different religious and ethnic groups.’ I trust that meets with your approval.” (E-mail from Robert Plummer, September 7, 2007)

We replied:

“Many thanks for doing that. It’s a small but important difference.

“After the disaster that has befallen Iraq — and with Iran now in the crosshairs — it’s surely vital for all of us to regard any professed government aims and pronouncements with skepticism, and to shine a light on the underlying motivations that drive state policy.” (E-mail to Robert Plummer, September 7, 2007)

A similar challenge from Media Lens to Andrew Ward, the Financial Times’s White House correspondent, on his reporting of the Iraqi oil law, elicited this curious response:

“Newspaper deadlines do not, unfortunately, allow for the cross-checking of every statement given by the White House. But I will keep your email as reference for the next time I write about the issue.” (E-mail, September 21, 2007)

This reads like a straightforward admission that the FT generally takes at face value any statement issued by the White House, despite all the deceptions of the war against Iraq.

Concluding Remarks — Not About Oil, Of Course!

The real agenda behind Iraq’s oil — the striving by powerful states, particularly the US, for strategic control of the resource-rich Middle East — has been all but ignored by the corporate media. When the truth is glimpsed, it is waved away as very much a secondary aim trailing behind the noble commitment to ‘democracy’. As one Cambridge academic noted in the Financial Times:

“The war in Iraq is not, of course, about oil. Coalition troops are there to advance democracy and to protect the innocent. But the consequences for the world’s energy markets of an unresolved conflict in a country that holds the world’s third largest accumulation of oil reserves cannot be ignored.” (Nick Butler, director of the Cambridge Centre for Energy Studies at the Judge Business School, “Iraq needs an ‘oil for peace’ deal,” Financial Times, September 12, 2007)

What is routinely missing from the corporate news media is historical context shedding light on Washington’s real, rather than stated, motivations. Of central and long-standing relevance is the 1945 US State Department description of Saudi Arabian energy resources as “a stupendous source of strategic power, and one of the greatest material prizes in world history.” Undiscovered oil fields in Iraq could well boost that country’s reserves to 300 billion barrels, even more than in Saudi Arabia.

Indeed, the whole of the Gulf region has long been considered “probably the richest economic prize in the world in the field of foreign investment.” (Cited in Noam Chomsky, Hegemony or Survival, Hamish Hamilton, London, 2003, p.150)

Based on copiously documented historical evidence, Noam Chomsky writes of US power:

“The basic missions of global management have endured from the early postwar period, among them: containing other centers of global power within the ‘overall framework of order’ managed by the United States; maintaining control of the world’s energy supplies; barring unacceptable forms of independent nationalism; and overcoming ‘crises of democracy’ within domestic enemy territory.” (Ibid, p.16)

But these truths, necessary for any public understanding of world affairs, are deemed too ‘radioactive’ to be carried by the corporate media.

Media Lens is a UK-based media watchdog group headed by David Edwards and David Cromwell. The most recent Media Lens book, Propaganda Blitz by David Edwards and David Cromwell, was published in 2018 by Pluto Press. Read other articles by Media Lens, or visit Media Lens's website.

5 comments on this article so far ...

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  1. Mike McNiven said on October 13th, 2007 at 11:23pm #

    Al Gore and Iraq:

  2. Mike McNiven said on October 13th, 2007 at 11:48pm #

    Very sorry! Wrong URL abour Al Gore (D)! Please try:

    October 13 / 14, 2007
    It’s As Ridiculous As If They’d Given Goebbels One in 1938
    Al Gore’s Peace Prize

  3. brian said on October 14th, 2007 at 11:28pm #

    ‘But many journalists cannot, or will not, grasp the notion that there are serious limits to news reporting and debate; limits that are set by powerful interests in society. ‘

    these powerful interests need to be identified and named….publically. nly that will have any chance of reducing their power.

  4. brian said on October 14th, 2007 at 11:32pm #

    ‘“I didn’t ‘marginalise’ or ‘ignore’ anyone’s arguments. I simply mentioned the oil law in passing, in a necessarily brief fashion, because it was peripheral to my theme.’

    why is it peripheral to him at all? Surely its most important. Id it the task of professional(ie paid) journalists not to write on important issues?

  5. Deadbeat said on October 15th, 2007 at 8:15pm #

    This is either not about oil or the biggest blunder every in order to acquire another countries resources. There is a line of think and expression by liberal and so-called “leftist” to spin the invasion of Iraq and a “blunder” or a “mistake”. However if you see this incursion as a way to destroy a nation that advance Israeli hegemony then then it is a remarkable success.