Past As Prologue: Multinationals Take Another
Step To Steal Iraq's Oil
Partially hyperlinked to sources.
For all sources, see the data
Greetings, you're listening to
podcast number 126 of Blast The Right. I'm
your host Jack Clark. Great to have
you on board.
Today, you'll hear how the
multinational oil companies have taken another step towards stealing Iraq's oil.
And, in the second segment, you'll
get some great public opinion stats on the hottest issues, guaranteed to
demoralize your right-wing friends and acquaintances.
Let's get right into it.
Sources you'll hear in this first
segment include: the New York Times, the Washington Post, the British newspaper
The Independent, democracynow.org, the Los Angeles Times, the book Overthrow by
former New York Times reporter Stephen Kinzer, the New York Daily News, and the
Inter Press Service news agency.
Last week the New York Times revealed
details of new agreements currently being negotiated between multinational oil
companies and the government of Iraq. The
Times did give this front page play, but the story hasn't gotten much traction
elsewhere. The public's undoubtedly
largely unaware of it.
But it's critically important that
you understand the significance of this development.
To do that, you need to hear some background.
For roughly the first half of the
twentieth century, seven Western corporations controlled the world's oil.
Those seven are now merged into four: ExxonMobil, Chevron, Shell and
The oil firms achieved their
corporate stranglehold by imposing a severe form of contract called a production
sharing agreement, or PSA.
Under these one-sided deals, the
multinationals essentially controlled everything: exploration, extraction and
sale. They paid a pitifully small
royalty to the country which still retained nominal ownership of the oil.
That royalty was often as low as 12.5%.
Since the 1960's, a wave of
nationalism and anti-colonialism inspired Third World nations to force the
multinationals to agree to a totally different arrangement.
Here, the country nationalizes its
oil, and sets up a national oil company to control the process of exploration,
extraction and sale. The
multinationals are hired to perform specific services only.
Instead of the split being as much as 88-12
in the company's favor, that type of percentage is flipped.
The country now retains the vast bulk of the revenue.
Most of the world's oil is now
produced under this second, nationalization model.
Oil company control in the form of PSA's is the case with only 12 percent
of the world's oil.
Most OPEC nations follow the
nationalization model. Iraq's oil
system has been under state control for the last three decades, ever since
Saddam nationalized it.
Here's the rub, as one analyst put
ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back.
Trying to get it back.
OK, get the picture.
That's the setup.
The oil companies are salivating to get back the oil that is rightfully
theirs to exploit and profit from.
One of their prime targets has been
Here's the head of Chevron in 1998:
Iraq possesses huge
reserves of oil and gas — reserves I’d love Chevron to have access to.
How about then head of Halliburton Dick
Cheney in 1999:
By 2010 we will need [a
further] 50 million barrels a day. The Middle East, with two-thirds of the oil
and the lowest cost, is still where the prize lies
In 2001, Vice-President Cheney's
energy task force says it wants Middle Eastern countries
to open up areas of their
energy sectors to foreign investment.
As the Iraq war gets closer and
closer, the focus is more explicitly on Iraq.
The U.S. State Department's Oil and
Energy Working Group says
should be opened to
international oil companies as quickly as possible after the war.
It helpfully adds that those
multinational friendly, unfair-to-the-country PSA's should be the form of
Then well into the occupation of
Iraq, you get the icing on the lets-not-even-hide-our-oil-lust cake. It's in the
bipartisan-endorsed Iraq Study Group report of December, 2006.
remember that one?
No. 63 unabashedly sets forth the corporate agenda for Iraq's oil wealth.
The US should
"assist Iraqi leaders
to reorganize the national oil industry as a commercial enterprise"
in Iraq's oil sector by the international community and by international energy
The right-wing did their best to
leave nothing to chance with Iraq's black gold.
Around 2005 the Bush administration
hired the consultancy firm BearingPoint to "advise the Iraqi Oil Ministry
on drafting and passing a new national oil law."
After the law was drafted, it was
reviewed by international oil companies, the US and British governments, and the
International Monetary Fund.
Only then was the Iraqi parliament
allowed to see it.
As the New
York Daily News put it:
It's a radical departure
not only from Iraq's existing structure but from how oil is managed in most of
the world today."
A non-corporate oil industry analyst
said that law would function to the
great detriment of
Iraq’s economy, democracy and sovereignty.
Now let me give you some of the gory
The law provides for those terrible
production-sharing agreements, PSA's, where the multinationals get a hunk of the
profits, and have substantial control over the process.
The Iraqi's would be locked into these one-sided agreements for 15-35
Iraq has 80 known oil fields.
The Iraq National Oil Company would retain exclusive control of just 17
of them. The rest, plus all fields
as yet undiscovered -- all fields yet undiscovered -- are thrown open to foreign
The law goes further than even the
worst doomsayers predicted. Way
beyond prior PSA's.
British Petroleum and the other Western oil giants could end up on the board of
directors of the Iraqi Federal Oil and Gas Council, while Iraq's own national
oil company would become just another competitor.
It gets even worse.
The foreign multinationals will be
able, essentially, to run wild in Iraq:
They're given the right to
--take 100% of their profits out of
--refuse to take Iraqi companies as
--refuse to hire any Iraqi workers,
--refuse to share technology
And, if there's a dispute, these
foreign multinationals won't be subject to Iraqi law, won't come under the
jurisdiction of that nation's courts.
If it sounds to you like the law was
written not by Iraqi's, but by the Bushians, well, as you of course just heard,
it essentially was.
Passage of this law became a high
priority for the Bush administration.
You wondering how'd the Bushians do
with their let's-steal-Iraq's-oil scheme?
So what happened to the US-written
Iraq oil law?
It ran in to a firestorm of
opposition in Iraq because Iraqis saw it was essentially a
For example, Iraq's trade unions
wrote a joint letter to the Iraqi President, which read
agreements are a relic of the 1960s
They will re-imprison the
Iraqi economy and impinge on Iraq's sovereignty since they only preserve the
interests of foreign companies. We warn against falling into this trap.
The US press usually points to
disagreements among the Sunni's, Shiite's and Kurds as to how profits should be
distributed among themselves, as the reason for opposition to the law.
That's part of it. But so is
the don't-give-the-oil-away sentiment.
With this new Iraqi oil law stalled,
you now arrive at the present-day situation, and the deals announced last week.
If the multinationals can't yet seal
the deal formally, they'll start tiptoeing in the back door in sweet
anticipation of soon owning the house.
What an amazing headline and opening
paragraph of the New York Times story:
Deals With Iraq Are Set to
Bring Oil Giants Back
By ANDREW E. KRAMER
BAGHDAD — Four Western
oil companies are in the final stages of negotiations this month on contracts
that will return them to Iraq, 36 years after
losing their oil concession to nationalization as Saddam Hussein rose to power.
Those four companies are ExxonMobil,
Shell, Total and BP.
The very companies Iraq took the oil
back from 36 years ago, are now being invited back in, thank you very much, by
the US-propped-up Iraqi government.
Chevron, and several smaller oil
companies are also involved.
Now, these deals aren't formally set
up as the exploitative PSA's. They're
nominally structured as service contracts. The companies will supposedly just be
assisting the Iraqi oil ministry.
But, a provision being negotiated
would make payments in oil, not cash. So
the companies could reap large profits.
Leila Benali, an expert at Cambridge
Energy Research Associates, said that
These are not actually
service contracts. They were designed to circumvent the legislative stalemate.
As with most things right-wing
instigated, there are many unseemly
aspects to this.
These are no-bid contracts, unusual
for the oil industry.
The Iraqi Oil Ministry offered as a
defense that these companies had been advising the government for two years
But 46 companies from Russia, China,
India and elsewhere had been provided similar free advice, and they didn't get
any contracts, no-bid or otherwise.
The critical point here, is the
future advantage the US and other Western oil companies will now enjoy.
The contracts, which would
run for one to two years and are relatively small by industry standards, would
nonetheless give the companies an advantage in bidding on future contracts
Ms. Benali explained:
The bigger prize everybody
is waiting for is development of the giant new fields
Those would be the ones subject to
the presently-stalled, give-away-the-store, US-drafted Iraqi oil law.
You may be amused at how gingerly
some of our corporate media raise the issue of, well, maybe the Iraq war was
blood for oil.
Here's reporter Kramer in the New
There was suspicion among
many in the Arab world and among parts of the American public that the United
States had gone to war in Iraq precisely to secure the oil wealth these
contracts seek to extract.
A similar paragraph in the Washington
Post danced around the issue:
A higher-profile role for
Western companies in Iraq’s oil industry is likely to revive speculation that
the Iraq war was motivated by a desire to tap into reserves that were controlled
by foreigners until the 1960s, when the industry was nationalized. The belief is
widespread in the Arab world.
Belief. No basis in fact at
all, is there?
You now know better than those just
reading the New York Times and the Washington Post.
And given all you now know,
especially that the US drafted the Iraqi oil law, this New York Times paragraph
about these preliminary deals is even more of a joke, don't you think? quote
It is not clear what role
the United States played in awarding the contracts; there are still American
advisers to Iraq’s Oil Ministry.
What does the right-wing have to say
for itself.? Oh, the usual
right-wing out-and-out lying:
Secretary of State Condoleezza
Rice…said the U.S. government played no
role in securing the deals. She called the impending contracts a sign that
security gains are attracting foreign investment in Iraq.
As you now understand, the oil giants
see Iraq as a rare opportunity to get their hands back on major oil deposits.
If you've been listening to Blast The
Right for a while, you know that in the rest of the world, the trend actually
continues to be the exact opposite
[T]he oil majors are also
struggling to replace their reserves as ever more of the world’s oil patch
becomes off limits. Governments in countries like Bolivia and Venezuela are
nationalizing their oil industries or seeking a larger share of the record
profits for their national budgets. Russia and Kazakhstan have forced the major
companies to renegotiate contracts.
For more details about what's
happening in Bolivia and Venezuela's battle with the multinationals, see
podcasts 49 and 68.
It's all of a piece.
In podcast 121, you also heard about protests in Mexico against the
efforts of that country's right-wing government to hand off its oil industry to
The struggle goes on.
Some of you may be thinking to
yourselves, well, sure, US and other Western-based multinationals would like to
control the oil, but would the US ever go so far as to overthrow a government
for that purpose?
Well, it's a well-documented
historical fact that we've done just that.
For over 50 years Iran had been
getting the short end of an 84-16%
production sharing deal. So in 1953
the democratically-elected government of Iran nationalized its oil industry.
The United States and Great Britain used their intelligence agencies to
overthrow the government, and install the Shah as dictator.
He ruled in bloody fashion for 26 years.
Thus was sowed the seeds of the Iranian revolution in 1979.
We overthrew a Iranian government in
1953 to get Iranian oil back into multinational hands, and a half century later,
in 2003, we overthrew an Iraqi government to get Iraqi oil back into
And, I would add, to establish
permanent military bases in Iraq. Remember
podcast 58 about the Project for a New American Century?
Our actions in Iran caused massive
resentment there and led to a takeover of that country a quarter century later
by hard-line Islamic radicals.
Our actions in effectively grabbing
Iraq's oil, will similarly produce results we won't like, and probably in far
So there you have it.
Just this past week, it comes to
light that the oil giants now have their foot in the door, their nose under the
tent, their bloody claws starting to encircle the throat of the Iraqi people.
A former Exxon CEO, Lee Raymond, was recently
unabashed and blunt:
[T]he former chief
executive of Exxon, Lee Raymond, praised Iraq’s potential as an oil-producing
country and added that Exxon was in a position to know. “There is an enormous
amount of oil in Iraq,” Mr. Raymond said. “We were part of the consortium,
the four companies that were there when Saddam Hussein threw us out, and we
basically had the whole country.
"We had the whole country."
And to have the whole country again,
is their goal, make no mistake about it.
I wish the Iraqi people well in their
struggle to prevent the theft of their oil.
You and I exposing this attempted
grand larceny is one way we can help. As
the saying goes, sunlight is a great disinfectant.
Demoralize A Right-Winger: Tell Them The Truth
About US Public Opinion
Partially hyperlinked to sources.
For all sources, see the data
How'd you like to demoralize your
friendly local right-winger? In
fact, you can demoralize not just one, but a whole bunch of them.
All the right-wingers you know.
Because nothing gives a right-winger
more satisfaction, than the smug belief that the American public is on their
side, is conservative, backs up their positions.
That it's we progressives who're out of touch with mainstream America.
Well, just imagine how bummed out
they'd be, all these right-wingers, if they knew how wrong they truly are.
As with most things right-wingers
say, the exact opposite is true.
There's some juicy additional
evidence of this right now, to further back up what you heard, if you were a
listener back last Fall.
Sources you'll hear in this segment
include: rasmussenreports.com, mediamatters.org, greenbergresearch.com, the
Associated Press, and pewresearch.org.
Last September and October you heard
my three part series, called Reason To Cheer.
You learned that surveys from major polling organizations all show that
Americans support progressive
policies on most every economic and social justice issue; that our progressive
majority is growing larger and larger; and that increasingly
the country increasingly progressive.
For starters, try the overall role of government, health care,
immigration, taxes, and moral values. Yes,
Majorities of your fellow citizens --
often 2/3 or more -- endorse all of these progressive positions:
government should provide more, not less services
And to top
it all off, the views of the nation's youth on many issues are even more
strongly progressive than that of the country as a whole.
by The New York Times, America's youth "have continued a long-term drift
away from the Republican Party."
Fair enough, and a joy to hear.
Enough to bring a smile to your face, to paint the picture quite rosy.
Well, it gets even better, and this
is what you can use in this Summer of 2008 to drive a stake through any
remaining political enthusiasm your right-wing friends and acquaintances may
still be mustering for their cause.
Scott Rasmussen is a nationally
recognized pollster. He's also a
conservative Republican. So one
would expect that he's not inclined to tilt his polls in favor of Democrats.
If a Rasmussen poll has bad news for
the GOP, you can bet that there's truly some real world bad news there.
So the following really caught my eye
the other day.
The June Rasmussen poll
of the top ten issues on the electorate's mind, found that the Democrats are
trusted more than the Republicans on every single one.
Every single one.
Now there are the usual suspects
By double digits, Americans trust
Democrats more on health care, education, the economy, government ethics and
corruption, and social security.
Telling your right-wing buddies that
won't affect them much.
They'll shrug it off, and say, maybe
so, but on the things people really care about -- by which they mean security
issues, plus the hot-button, culture war, wedge issues -- on those, the
right-wing side wins hands down.
Right-wingers are going down here as
On Iraq, Democrats are trusted by
more than an 8 point margin.
On abortion, by a 7 point margin.
Yes, by a 7 point margin. Apparently
John McCain's calling on his website for the overthrow of Roe v. Wade, is not
going over that well. And many
Americans probably aren't yet even aware of his extreme position on this issue.
Closely monitor the look on the face
of any right-winger you tell this to.
Continuing with the countdown:
On immigration, Democrats enjoy a 4
On national security/the war on
terror, a 3 point advantage. Not a
big margin, but most right-wingers would expect their side to be way ahead on
Lastly, there's taxes.
The be-all and end-all of right-wing ideology, cut, slash, eliminate
where possible any tax you can get your hands on.
By which they mean of course,
primarily reduce the tax burden on the wealthy, which Bush's tax cuts have done
quite well, they wealthy will be the first to admit.
The richest 10% of Americans have
gotten somewhere between 60 and 80%
of the benefit of Bush's tax cuts.
But right-wingers think they're
continuing to pull the wool over the public's eye, that the public still thinks
it's Republicans who'll lower the taxes of the average Joe.
I guess not.
By a 2% margin, voters trust
Democrats more on taxes than Republicans.
Again, a narrow margin, but the
right-wing would expect a landslide in the opposite direction.
Crestfallen may not begin to describe
the look you'll see on the face of the right-wing recipient of this bit of news.
Now one caveat:
When Obama and McCain are substituted
for generic Democrat and Republican, McCain is even with Obama on economic
issues, and has a double digit edge on national security topics.
As Rasmussen says, the attitudes
indicated by the generic Republican vs. Democrat question
are likely to have a
bigger impact on Congressional races rather than the Presidential election
Well, in a worst case scenario, much
bigger Democratic majorities in the House and Senate would be able to kill many
of the bad things a President McCain would be try to do.
Supreme Court nominees, anyone?
And since Rasmussen has actually had
Obama ahead of McCain over the last couple of weeks by up to several points,
maybe it'll be an overwhelming Democratic majority Congress combined with a
Now that would really demoralize your
friendly local right-wingers, big big big time.
And mark my words: if a President
Obama and strong Democratic majority Congress don't follow a progressive path,
I'll be the first one out there to condemn and agitate against them.
For now, though, I'm focused on
ripping our government out of the hands of the right-wing.
Demoralizing them is one part of
achieving that all-important goal.
You've just gotten some potent ammo
to do so.