[A-List] UK imperialism: Iraq

["Michael Keaney" <michael.keaney@xxxxxx>]

The world's petrol station: Iraq's past is steeped in oil ... and blood

Since black gold was struck in 1927, the West has guarded its supply by
keeping Baghdad in check. By Trevor Royle
The Sunday Herald, 6 October 2002

The British government's position was unequivocal: there had to be regime
change in Iraq. An official government paper argued that 'Iraq will never be
safe and stable, while she has an army, until a real public pinion develops
sufficiently strong to convince un scrupulous politicians that any of them
who use the army to seize power will be politically outlawed.'

The words are not Tony Blair's. The paper was written in 1941, when Britain
was engaged in the war against Nazi Germany. A precursor to Saddam, a
nationalist called Rashid Ali, was elected prime minister and began taking
an anti-British and pro- German line. His claims became more extravagant and
he used oil as a weapon: if Britain wanted to continue to benefit from Iraqi
supplies it would have to promote the interests of the Arab population in
Palestine.

In a short and sharp campaign Rashid Ali was unseated and fled into exile.
The use of British air power demoralised his supporters and British and
Indian land forces made short work of securing the country and its vital oil
stocks in the Mosul region. From the beginning of the current crisis earlier
this year a similar emphasis on the need for a regime change has been played
up by President George W Bush and his security and foreign affairs advisers,
who have used it as a mantra to underscore their determination to punish
president Saddam Hussein and to destroy his capacity for manufacturing
weapons of mass destruction.

However, with Saddam deposed the way will be open to create a friendly
government in Baghdad, a client state that will be dependent on US support
and give Washington a new sphere of influence in the Middle East. Quite
apart from the rich pickings to be gained from Iraq's oil wealth, which the
US Department of Energy puts at '112 billion barrels of proven reserves
along with 220 billion barrels of probable and possible resources' regime
change could help to realign Washington's strategic partnerships, not least
with neighbouring Saudi Arabia, increasingly seen as a loose cannon.

'In the longer term the US might be wise to extricate itself from its
historic links with Saudi Arabia,' says a US diplomatic source. 'Let's look
at the matters as pragmatically as we can. The Saudis have not been helpful
to US interests in the war against terrorism, they will not offer support in
any attack on Iraq and it was Saudi money which helped to bankroll al-Qaeda.
They're not the friends they once were.'

American interest in Saudi Arabia dates back to the 1930s, when US oil
companies began exploiting the country's rich supplies. The arrangement laid
the foundation for the post-war settlement by five US companies -- Standard
Oil (30%), Texaco (30%), Socal (30%) and Socony-Vacuum (10%) -- to control
production through the American Arabian Oil Company (Aramco).

In a further carve-up Socal and Texaco controlled oil production in Bahrain
while Kuwait's supplies were divided between the US company Gulf and the
British Anglo-Iran company, which also managed production in Iran. At the
same time Iraq was divided three ways amongst Anglo Iran (British), Standard
Oil and Socony-Vacuum (US) and Compagnie Francaise des Petroles (France).

For everyone concerned it was a neat arrangement. The Western oil companies
flourished, the Arab countries' ruling families grew phenomenally rich from
the royalties and the governments of Britain, France and the US enjoyed the
possession of vital spheres of influence in the Middle East. There were
blips, such as the overthrow of Iraq's Hashemite Royal family in 1958 and
the religious revolution that swept away the Shah of Persia from Iran in
January 1979, but for the bulk of their existence -- Iraq and Saudi Arabia
are less than a century old -- control of oil has meant control of power in
the Middle East.

Central to that has been the relationship between the US and Saudi Arabia,
an agreement which gives the one access to the country's oil wealth and the
other the protection of the world's only super-power. To a great extent the
ruling House of Saud depends on US promises to keep it safe from internal
and external threats but it comes at a price. There is a sizable military
garrison in the country and US warplanes are familiar sights at Saudi air
force bases. These are already a focus for growing discontent amongst
younger Arabs, many of them Wahhabi fundamentalists, who regard the American
presence as an unpleasant infection.

The disquiet is not confined to Riyadh. In Washington's security community
Saudi's links with terrorism are an uncomfortable reminder that their
closest Arab ally in the Middle East could be a potential threat. While US
military commanders would prefer to be able to use Saudi sites for an attack
on Iraq, especially the giant Prince Sultan air base with its
state-of-the-art command-and-control centre, the Bush administration has
resigned itself to being denied access to them. Not only would Saudi
compliance encourage political instability but it could inspire further acts
of Saudi-backed terrorism. That intransigence alone gives the US a spur to
find new friends in the region.

'A rehabilitated Iraq is the only sound long-term strategic alternative to
Saudi Arabia,' argues the Sunday Herald's diplomatic source. 'It's not just
a case of swopping horses in mid-stream, the impending US regime change in
Baghdad is a strategic necessity.'

At present the contracts to exploit Iraqi oil are controlled by two
companies - France's TotalFinaElf, which has exclusive rights to develop the
potentially rich Majnoon field that marches with the Iranian border, and
Russia's LukOil, which recently entered into a $3.5 billion deal with
Saddam's government. Under US law American oil firms are prevented from
entering into contracts with Iraq but all that could change once there is a
new regime in Baghdad.

Opposition groups have agreed that contracts made with Saddam would have to
be revised, if not torn up, and that the granting of new contracts could
depend on the level of support given to the regime-change operation. The
Iraqi National Congress has announced it will 'cancel all contracts that are
not in the interests of the Iraqi people and will reopen bidding on them'
while its leader Ahmed Chalabi has recommended the creation of a US-led
consortium to exploit the country's untapped oil wealth.

Anyone suggesting that this is not a spur should turn to the US State
Department's assessment of Middle East oil in the post-second world war
world: 'These resources constituted a stupendous source of strategic power,
and one of the greatest material prizes in world history ... probably the
richest economic prize in the world in the field of foreign investment.'

It remains an enticing prospect. Second only to Saudi Arabia, Iraq contains
the world's biggest oil reserves, but years of warfare and sanctions have
badly degraded the capacity to extract the oil. Equipment is fast becoming
obsolete, spare parts are impossible to find and according to intelligence
gained by the US Department of Energy there is a risk of a major breakdown
in the infrastructure. All this requires investment and expertise and there
is little doubt US companies such as Chevron-Texaco would be well-placed to
exploit that need.

Small wonder that Iraq's response to President Bush's September statement to
the UN General Assembly was a robust attack on what it sees as Washington's
underlying motives: 'The US admin istration wants to destroy Iraq in order
to control the Middle East oil, and consequently control the politics as
well as the oil and economic policies of the whole world.'

Reacting with equal vigour, Washington denied the allegation that an oil
bonanza is around the corner but at the same time it is not being coy about
the strategic benefits that a regime change in Baghdad would bring. In
addition to creating a sphere of interest in the heart of the Middle East at
the expense of Saudi Arabia, the knock-on effect will be felt in
neighbouring countries. Jordan will be the chief beneficiary. A natural ally
of Iraq, its economy depends on heavily discounted Iraqi oil and the ability
to sell goods under the UN oil-for-food programme. Its Palestinian
population supports Saddam as much out of conviction as from a dislike of US
support for Israel and these factors have put King Abdullah in an
uncomfortable position.

According to Daniel Neep of the Royal United Services Institute the toppling
of Saddam would help the Jordanian king by giving him more breathing space:
'There are of course concerns about domestic discontent and internal
stability, but the choice between facing those uncertain spectres and the
more chilling prospect of being bereft of the mantle of 'US ally' is perhaps
easier to make than some might think.'

Syria and Turkey would also benefit by being freed from the invidious
position of having to make a choice between an Arab ruler, Saddam, and the
US.

Reopening Iraq's oil-lines will allow the wealth to trickle down to them at
a time when their economies have been stagnant for several years. It would
also bring under US influence a country that had been created in 1921 when
Britain and France had combined before the first world war had come to an
end to divide the area up into spheres of interest, which would essentially
be run from London and Paris. At one stroke the old Mesopotamian provinces
of the Ottoman Empire became Iraq in 1921, thereby putting a mixed
population of Kurds, Sunni and Shi'ite Muslims, Jews and Christians under
the control of a British puppet ruler, the Hashemite King Faisal.

One reason for the creation was strategic -- the need to protect Britain's
imperial interests in the Middle East -- but the second was oil. In 1927 oil
was discovered in massive quantities at a wadi called Baba Gurgur near
Kirkus and exploitation of the wells was given to the Iraq Petroleum
Company, which was owned jointly by Royal Dutch Shell, Anglo- Persian and an
American and French consortium. Its pipeline still carries Iraq's oil
through Jordan to the Mediterranean and from the outset the Iraqi Petroleum
Company's local managers acted as if they were colonial masters and not
commercial agents, a situation resented by Iraqi Arabs who brought Rashid
Ali to power.

Half a century after the British forced Rashid out of Iraq and into exile,
many Arabs see the same pattern repeating itself -- a Western desire to
create a friendly client state in an inherently unstable region and, above
all, the need to manage the region's vital oil supplies.