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May 27, 2003
 
Iraq war in focus
Muddy mix: oil, politics
Critics say Bush's interest in Iraq has more to do with its vast petroleum reserves than with its arsenal.

Photo
KARIM SAHIB / AFP, 2002
An Iraqi worker's hand tends to pipe at the Iraqi-Turkish pipeline in Kirkuk, Iraq. Oil production capacity has sharply declined in recent years, from 3.5 (million barrels of oil a day before the Iran-Iraq war to a low of 1.2 million barrels a day. Recently, production has been on the increase.
Iraq has the world's second-largest proven oil reserves.

The United States has the world's greatest thirst for oil.

And that, say some critics, is the true driving force behind President Bush's Iraq policy.

Iraq has reserves of 113 billion barrels — about 11 percent of the world's supply. Experts believe that there may be that much again still undiscovered in the country, enough to rival Saudi Arabia, the world's largest oil repository.

Oil politics has played a major role in the area since before Iraq's creation following World War I. Before the collapse of the Ottoman Empire, British-controlled Turkish Petroleum Company held oil concessions in Mosul, the Kurdish area in what is now northern Iraq.

In a series of agreements and trade-offs after the war, Turkish Petroleum became Iraq Petroleum Company (IPC), still controlled by the British and holding the concession for Mosul oil. Turkey and France, another player in the region, got pieces of Iraq Petroleum and Iraq got the Mosul region — and its Kurdish populace — as a province.

In 1961 Iraq took over 99.5 percent of the IPC's area, leaving it to operate only in the area it was currently drilling. By 1972, Iraq had completely nationalized the IPC and formed the Iraq National Oil Company to control the resource.

Photo
Today, critics say that it is no coincidence that the U.S. and Britain, home to the world's four largest oil companies, are the staunchest foes of Iraqi leader Saddam Hussein. And it is no coincidence that Russia, France and China were less eager for action against Saddam.

Russia's largest oil company, Lukoil, signed a 23-year, $3.5 billion deal with Iraq five years ago to rehabilitate the country's giant West Qurnah oil fields.

France had an even larger deal as its state-owned TotalFinaElf company was negotiating to explore the Majnoon field, which has estimated reserves of 20 billion to 30 billion barrels.

And China National Petroleum has a contract to develop part of the Rumaylah area, a production area substantially damaged during the 1991 Persian Gulf War.

Skeptics also question the administration's reported strategy of immediately moving to protect oil fields, so that Saddam cannot destroy them, in the event of a war. The administration says that oil revenue will be desperately needed to rebuild the country. Skeptics say the fields are being protected for outside oil interests.

Decaying industry

Still, the oil issues are not cut and dried. Iraq's oil industry has deteriorated drastically after two decades of strife. Where its capacity before the Iran-Iraq war was 3.5 million barrels of oil a day, it reached a low of perhaps 1.2 million. It might take $5 billion and three years to restore production to pre-war levels. To reach 6 billion barrels a day within 10 years could cost $50 billion. Foreign oil companies might not gamble that much on an unstable, post-war Iraq.

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Library of Congress, Portals to the World: Links to electronic resources. www.loc.gov/rr/international/amed/iraq/iraq.html

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United Nations disarmament news: Leads searcher into information on global terrorism and weapons bans and stockpiling. disarmament.un.org

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MidEastWeb: A site created by Arabs, Jews and others interested in issues of coexistence all over the Middle East. Provides history, maps and articles in Arabic, English and Hebrew. www.mideastweb.org

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Iraqi expatriates' views: A site created by Washington, D.C.-based group of expatriates promoting human rights in Iraq. www.iraqfoundation.org

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State Department site: Contains issues leading to conflict between the U.S. and Iraq from the U.S. point of view. www.state.gov/p/nea/ci/c3212.htm

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Peace site: Sponsored by Voices in the Wilderness, a Chicago-based group that has sent small groups into Iraq to promote peace and report on human-rights conditions. www.iraqpeaceteam.org

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