Nothing surprising:
Bechtel wins contract prize, Oliver Burkeman, The Guardian, 18 April 2003
An engineering firm with close links to the Bush administration won the main contract for the reconstruction of Iraq’s infrastructure last night, sealing a deal worth up to $680m (£432m) to rebuild the country’s electrical, water and sewage systems.
Looks like the predictions that American control of Iraqi oil fields might be used to bring OPEC into line were pretty much on the mark. This would also explain the need to secure the oil fields first before worrying about the law and order situation which led to looting of hospitals, museums etc in Iraq.
Will Opec’s oil price decrees fall on deaf ears?
Foreign Editor’s Briefing by Bronwen Maddox
COULD the war in Iraq prove to be the death of Opec? The conflict has already been blamed for threatening the demise of the United Nations, the European Union and the North Atlantic Treaty Organisation; to add the Organisation of Petroleum Exporting Countries to the list hardly seems ambitious.
It would be premature to write off the oil producers’ cartel, but all the same there is an urgency about its predicament. Opec is pleased with itself — and worried. Throughout the war, it kept oil supplies flowing and the price more or less stable. But with the war’s end, it has called an emergency meeting for Thursday to head off a glut and a sudden collapse in the price.
**Even if it negotiates this month’s obstacles, Opec’s problems will get worse, and in part this is down to this weekend’s elections in Nigeria. But there are two other reasons why the world might look forward to lower oil prices in the coming years, and they are labelled Iraq and Russia. Opec’s ability to counter these three issues is small: talk of the end of the cartel may be melodramatic, but we are moving into an era when its power is almost certain to wane. **
Before the war there were plenty of warnings that oil prices would rocket, and so they did. Then they came down again, as the predicted scenes of burning Iraqi oil wells failed to materialise.
Opec can pride itself on managing to keep production levels steady during the conflict, making up for the sudden stoppage of Iraqi oil. Saudi Arabia fulfilled its role as the “swing producer”, making up the shortfall, and the war coincided with Venezuela’s unexpectedly early return to something like stability.
But having risen to the occasion of the war, Opec must now persuade its members to cut back or risk a collapse in oil prices, as happened after the 1991 war. The cartel is producing about two million barrels a day too much, or about a tenth over, its own officials have suggested. Yet Opec has always been better at getting its members to pump more than it has at convincing them to cut back.
As the US Department of Energy put it in a monthly report last week: “Opec’s success in offsetting supply losses kept oil prices from spiking once the war in Iraq began. However, this same success has now turned to concern that oil prices, which have dropped by almost a third as market worries over the situation in Iraq eased, risked falling further.”
Not everyone agrees. The International Energy Agency argued this week that the “glut” was an illusion, that developed countries’ stocks of oil are low and that Opec had no reason to cut production. But the nervousness of the markets suggests that Opec may well be tempted to go ahead.
As the cartel well knows, even if it overcomes the hurdles of the next few months, there are good reasons why it will be difficult to keep propping up the price.
**Iraq itself may prove hardest to control. It would be overdoing the conspiracy theories to suggest that the US intended to destroy Opec with this war. But to pay for Iraq’s reconstruction, the country needs to sell as much oil as possible. **
Every plan for its renaissance aims to treble its production up to Saudi Arabian levels of between seven million and eight million barrels a day. Any exhortation by Opec to hold back is likely to get short shrift from the new government in Baghdad; the cartel can console itself only that this will not happen for several years.
Then there is Russia, firmly outside the cartel and, to judge by past experience, largely immune to its pleas. Opec can, of course, try to persuade Russia that a high oil price is in its own interests and that it should therefore restrain production. Moscow would acknowledge that if the price does slip too low then the exploration and development of new fields will not happen. But in practice Moscow needs the revenues: it will continue to pump as much as it wants, and if Opec’s own restraint manages to keep the price up, so much the better. The effect of the cartel’s attempts at persuasion has been close to zero.
Finally, there is Nigeria. An Opec member, it is the fifth-largest of the US’s oil suppliers, and the Bush Administration, catching its breath after the war, has suddenly taken notice of this weekend’s elections. American policy has been to support the present Government of President Obasanjo and to hope for something like stability, particularly regarding Nigeria’s efforts to hold the Muslim north and the Christian south together.
True, the past month has not been stable. Violent ethnic unrest in the oil-rich Delta region halted about one third of Nigeria’s oil exports. Optimists, including foreign oil company investors, hope that the violence was largely precipitated by the elections. But there are still open sores that need addressing, particularly the complaint of the ethnic groups of the Delta, who are mostly excluded from its wealth.
But a new government is almost certain to want to step up oil production: that, presumably, is the basis on which oil companies have been investing. It has already boosted capacity to about 2.5 million barrels a day, half a million more than the level set by Opec.
The question for Opec is whether it legitimises this, turns a blind eye, or contests it, with the risk that Nigeria will walk out the door.
Nice fat contracts for American companies. The American military destroys, and the American companies do the rebuilding and make billions in doing so.
Forget Afghanistan, Iraq, Jordan, Syria and the rest of the un pronouncable countries of the Middle East. As far as the neo-cons in the White House are concerned.. it’s all one big Pipelinistan
American to oversee Iraqi oil industry, David Teather
The Guardian, 26 April 2003
The US is preparing to install an American chairman on a planned management team of the Iraqi oil industry, providing further ammunition to critics who have questioned the Bush administration’s agenda in the Middle East.
The administration is planning to structure the potentially vast Iraqi oil industry like a US corporation, with a chairman and chief executive and a 15-strong board of international advisers.
According to a report in the Wall Street Journal, it has lined up the former chief executive of the US division of Royal Dutch/Shell, Philip Carroll, to take the job of chairman.
Large scale decisions on investment, capital spending and production are likely to need the approval of the advisory board, which will act like a board of directors. The day-to-day management team will be vetted by US officials and is likely to be made up of existing and expatriate Iraqi oil officials.
The structure is likely to anger opponents of the administration who argue that the US is wielding too much power in Iraq.
By involving non-Iraqis, the US could also expose itself to the accusation that it is attempting to take control of the industry and open the door to foreign investment by major western oil companies - a perception the Bush administration is keen to avoid.
The Middle East has, since the early-to-mid-1970s, largely closed the door on foreign oil firms - but contracts have been awarded to engineering and construction firms such as Bechtel, which was recently handed a $600m (£380m) commission in Iraq by the US Agency for International Development.
US and Iraqi engineers have resumed modest oil production in the south of the country, in fields close to Basra.
The other major field in the north, near Kirkuk, has yet to be restarted, but is expected to begin pumping oil in the next few days. The Basra fields produced 60% of Iraq’s pre-war production of around 2.5m barrels a day.
The US is pushing for an end to economic sanctions to allow the oil to be freely exported.
A handful of Iraqi oil officials have been attempting to restore some order to the country’s energy infrastructure and have been meeting regularly with the US military in Baghdad. The US has been eager to get the cooperation of the skilled Iraqi oil administration, but an attempt to impose a structure on the industry with outside involvement could cause friction.
The oil minister in the ousted Saddam regime, Amer Mohammed Rasheed, is on the US’s most-wanted list.
Iraq, with 112bn barrels of proven reserves, is second only to Saudi Arabia, and has the potential to become a superpower in the oil industry. Experts believe that with billions of dollars of investment in the nation’s crippled infrastructure it could produce up to 6m barrels a day within five or six years. There are believed to be 200bn barrels of probable reserves.
The oil beginning to pump in Iraq is being used for domestic purposes. Once exports are up and running again, US and British officials have said the aim is to put the proceeds into a fund to pay for the reconstruction of Iraq. But details of the fund, including who would administer it, have been scant.
The new management team and part of the advisory board are expected to be named next week. The chief executive would play a similar role to the former oil minister and would represent Iraq at meetings of Opec, the organisation of oil exporting nations. The position of vice chairman is expected to be filled by Fadhil Othman, who led Iraq’s oil marketing group before Saddam came to power 24 years ago.
Thamir Gadhban, a senior oil ministry official working to restore order to the industry in Baghdad, told the Journal that he expected the chief executive to come from the ranks of the existing hierarchy. “The Iraqi oil industry is not a new one, and there are experienced people in the ministry of oil and its organisations,” he said.
Back to business… get that oil well pumping, but neglect the hospitals that are lacking in the most basic of medical supplies.
Iraq reopens Kirkuk oilfield, BBC, 29 April 2003
If the US think they can grab the loot all to themselves they are sadly mistaken. If the British don’t get their slice of the pie then don’t expect them to stay quiet about just what a cash bonanza the war will provide to the flagging US economy. Hats off to Patience Wheatcroft for laying it on the line in the UK’s leading broadsheet and no doubt causing a few US politicians to squirm uncomfortably :k:
It’s time to be un-British and grab the spoils of war
Patience Wheatcroft
We have been far too polite in allowing US companies to hog Iraqi contracts
There really is no delicate way to put this: Britain helped the United States in the Iraq war and now we want our financial reward.
Such words are not for the squeamish. They will feed the prejudices of the peaceniks and appal the sensibilities of the chattering classes. Only behind the most solidly shut of closed doors do even the most fervent capitalists concur with each other that justice demands that a share of the contracts for rebuilding Iraq should come Britain’s way.
So one must have some sympathy for Baroness Symons of Vernham Dean, one of the growing number of ministers who have achieved office without having to go through the tedious business of persuading the electorate to vote in their favour. The baroness’s brief is international trade and investment and so her colleagues have decided that she should battle for Britain’s slice of the new round of Iraqi action.
Yesterday, she boarded a plane for Washington where she is due to meet those responsible for doling out the US Agency for International Development’s (USAid’s) billions. So far, hardly a cent has come the UK’s way and it cannot be said that our war allies show the slightest hint of a guilty conscience about this. Nor do they seem in the least abashed that some of the early winners in the contracts war have apparent links with the White House. So extensive is the President’s network of entrepreneurial friends, it was perhaps inevitable that among them would be some who were ideally suited to make a fortune restoring Iraq’s infrastructure.
Nevertheless, not everyone on the ground in Iraq thought that Stevedoring Services of America (SSA) was the best choice to take over the vital task of running the country’s largest port at Umm Qasr. Since the invasion, it has been kept open by the British Army and Air Marshal Brian Burridge, Britain’s chief military officer in Iraq, indicated that he would have hoped that when his men handed over control it might have been to Iraqis.
Honourable sentiments, no doubt, but not what Lady Symons should be saying.** Instead, she should demand to know why SSA had been favoured at the expense of P&O, which has proven expertise at running ports around the world and is laden with Middle East expertise. Diplomacy might deter her from mentioning the hefty personal donations that SSA’s president has made to the Republican Party: British government ministers know that such embarrassing coincidences have a habit of occurring. **But while P&O has maintained an elegant silence over the $4.6 million contract that did not come its way, the Government need not be so restrained.
Lady Symons will have to recall her years as a trade union leader and assume a suitably aggressive stance. Gordon Brown has had to find an extra £4 billion to fund the cost of the war when his sums were already beginning to look rather less healthy than he had hoped. No matter how just we may believe the cause to have been, we should leave the United States in no doubt that we would now like some of that cash back.
It would be very British for us just to stay at home, hoping that our friends across the Atlantic would not forget the support we gave them. We might even venture to say “please” but it would be at the risk of having desert sand kicked in our faces. As Digby Jones, the pugilistic Director-General of the CBI, puts it: “This is the time to be very un-British, very forceful.”
The Americans have been adamant that since it is USAid that is handing out the work, it will go straight to US companies and how they choose to subcontract will be up to them. But when the initial contract to Bechtel is for a whopping $600 million, the Government ought to be able to exert a little influence over how the business is shared out. So far, Bechtel has delivered only a couple of tiny contracts to British companies. It may be that the privilege of providing security services to Bechtel people as they went fact-finding in Iraq was not something that appealed to many, which could explain why brave Olive Security of the UK has the job.
Other governments have shown little reticence in charging into Washington demanding a share of the work. The Norwegians, for instance, have apparently pointed out their important role as part of the peacekeeping force in Afghanistan and listed what they would like in return.** Lady Symons is on stronger ground. Should she have any qualms about the morality of attempting to profit from the war, she should quickly try to persuade herself of the top-quality job that British companies would do. **
And on her return to Britain, she might also mention that to Geoff Hoon, the Defence Secretary. Poor Mr Hoon is currently wrestling with an issue that the men from the ministry have chosen to duck: the awarding of a £1.5 billion contract for the British Army’s tank corps. Should it go to a consortium of US and British companies or to Thales, the French company in which the French Government has a hefty stake?
One can almost hear the bureaucrats whispering “Don’t mention the war”, but the men in the Army have probably not yet forgotten the attitude of Jacques Chirac towards the conflict with Iraq. No matter that virtually half the Thales workforce is in Britain, the profits the company makes go to France.
In the United States, there would be no head-scratching over who should win the contract, no matter if the French bid did look slightly cheaper. When governments do business, they need to remember who their friends are. If Mr Hoon should favour the French rather than the US-British bid, not only would he risk being made the laughing-stock of the tabloids, he could render Lady Symons’s trip to Washington a waste of time.
Even the bankrupt American firms are winning contracts in Iraq…
WorldCom lands Iraq contract](BBC NEWS | Business | WorldCom lands Iraq contract)
More good news for the rosy future of the American economy. The re-building of Iraq is certainly going to prove lucrative for the US, let’s hope from a British point of view that the exposure of American hogging of all the contracts will lead to the UK getting a larger slice of the pie.
Well, despite all the massive civilian deaths and decades-long consequences of DU that will bless Iraq with generations of deformed babies - at least some individuals can still find something to smile about.
Companies from all over seek a piece of action rebuilding Iraq, Elizabeth Becker
New York Times [via GlobalPolicy website), 21 May 2003
The pitch from Egyptian and Jordanian companies is that since their workers speak Arabic, they are best suited for jobs rebuilding Iraq. The Filipino companies emphasize that they have a well-educated, English-speaking labor force that has worked around the world with American construction companies. And the British, though their appeals are understated, offer what some Bush administration officials argue is the most convincing case: that they shed blood in Iraq as the United States’ military ally and remain the most important partner in the occupation of Iraq.
[…] In less than three weeks, Bechtel, based in San Francisco and the largest construction company in the country, has been flooded with more than 20,000 e-mail messages, résumés and applications from people and companies around the globe hoping for a chance to win a subcontract, according to Howard Menaker, Bechtel’s Washington spokesman. The Web site explaining the subcontracting process says it has had 71,000 hits. “This response is huge,” Mr. Menaker said. “Is this normal? Not at all. This is a project that has garnered world attention, and this is extraordinary for us.” The would-be subcontractors are not deterred by the fact that Bechtel will only begin setting up makeshift offices in Iraq this week, that security in the country is tenuous and that electricity and running water may be nonexistent.
Moreover, the available money is far short of what reconstruction officials say will be needed. Bechtel’s original contract is for no more than $680 million. But independent estimates are that the final cost for an effort of the extent outlined in Bechtel’s contract with the United States Agency for International Development will be $20 billion. Bechtel’s Washington office has been visited by official delegations from Bulgaria, Romania, the United Arab Emirates, Lithuania, Australia, the United Kingdom, Singapore, the Philippines, Poland, Hungary, South Korea, the Czech Republic, Thailand, Portugal, Denmark, Turkey, Spain and Germany. Among other pitches, these countries are variously promoting their companies’ low labor costs, Arabic speakers and sophisticated technology. “An elaborate courting scene is going on all over Washington with official delegations and corporate officers walking around advertising themselves at public events,” said a lobbyist representing some of the companies. “In private they’re pulling out their hair because they can’t get the right information, and they’re afraid they’ll miss out on the biggest deal in decades.”
Don’t you ever see the glass as half full? Better to have freedom and hope to go along with “all the massive civilian deaths and decades-long consequences of DU that will bless Iraq with generations of deformed babies” than to have civilian deaths and deformed babies without also having freedom and hope.
You can’t change the past. All you can do is improve the future.
So true myvoice.
BTW..
Wonder if its possible to consider these investment contracts in a positive way?
Such as investing in Iraq infrastucture and possibly creating paying jobs for the Iraqi’s?
Surely the investors will employ Iraqi’s, thus giving them a way to provide for themselves, rather than walk around carrying a gun and waiting for OBL to tell them what to do.
**
Absolutely, i agree wholeheartedly. :k:
i believe, in order to ‘improve the future’ - individuals must be allotted the fundamental right (not privilege) to manage their own country, including their own oil resources and oil wells.
By all means look at them in whichever way you like. As a British citizen I’m looking at them from what we are going to get out of it. We can blah blah all we like at how we are going to do this for the Iraqi people but the bottom line is what it’s worth in pounds sterling to us and dollar value to you. If that wasn’t the case, we’d have been protecting the hospitals rather than the oil wells during the looting following the collapse of the Iraqi regime, don’t you agree?
Now this lady knows where it’s at :k:
It’s time to be un-British and grab the spoils of war
You need to register to read the article but I pasted it on the first page of this thread so you can read it there.
I’m glad to see that we are again finding things upon which we agree. I share your statement that individuals must be allowed the fundamental right to manage their country including their own oil resources and oil wells. And I believe that is exactly what the US and UK are trying to make happen in Iraq. If I see things that persuade me differently, I will be one of the first one’s to oppose them.
For the better part of 25 years, the “individuals” of Iraq have not been in possession of this right instead seeing their lives, liberty and natural resources subjugated to the whims of a madman.
Things are changing, creating a government that serves the people rather than suppressing the people of Iraq is a beginning.
[QUOTE]
*Originally posted by AvgAmericanGirl: *...
Wonder if its possible to consider these investment contracts in a positive way?
Such as investing in Iraq infrastucture and possibly creating paying jobs for the Iraqi's?
Surely the investors will employ Iraqi's, thus giving them a way to provide for themselves, rather than walk around carrying a gun and waiting for OBL to tell them what to do.
[/QUOTE]
I would be interested to know what was Iraq like before it committed suicide (by invading Kuwait).
[QUOTE]
Originally posted by myvoice: *
**And I believe that is exactly what the US and UK are trying to make happen in Iraq. If I see things that persuade me differently, I will be one of the first one's to oppose them.*
[/quote]
i am honestly glad to hear that.
[quote]
*For the better part of 25 years, the "individuals" of Iraq have not been in possession of this right instead seeing their lives, liberty and natural resources subjugated to the whims of a madman.
[/QUOTE]
*
Let's just hope one form of tyranny is not being replaced by another.
[QUOTE]
*Originally posted by underthedome: *
Things are changing, creating a government that serves the people rather than suppressing the people of Iraq is a beginning.
[/QUOTE]
Well tell us when that will happen, because yet again the American occupation regime has cancelled plans for Iraqi's to rule Iraq. While all the time it continues to award huge contracts to it's own companies to make loads of money in Iraq.