Editore"s Note
Tilting at Windmills

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June 30, 2008
By: Kevin Drum

ADVISING THE IRAQIS....Here's a piece of news that will surprise exactly no one:

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say.

....In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said.

"Detailed suggestions" indeed. I think that's what Michael Corleone called it too.

Kevin Drum 1:25 AM Permalink | Trackbacks | Comments (25)

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Just finished reading Larry Beinhart's thriller The Librarian. It makes stories like this seem awfully familiar. Of course, they would anyway.

Posted by: Kyle on June 30, 2008 at 1:37 AM | PERMALINK

This occurs every day in the United States. Why should Iraq be any different? I'm not suggesting that Iraqis don't have the wherewithal to draft and complete their own contracts, but this seems like a fairly natural process and one I'm not completely opposed to. I know the words U.S. government, oil and contract are in the same paragraph but that doesn't mean there isn't some merit to the proffered assistance.

Posted by: Dakota on June 30, 2008 at 1:54 AM | PERMALINK

With a moniker like "Dakota" you'd think that if "U.S.", "government" and "contract" came up in the one sentence you'd run for the hills. No?

Posted by: notthere on June 30, 2008 at 2:30 AM | PERMALINK

"I'm not suggesting that Iraqis don't have the wherewithal to draft and complete their own contracts, but this seems like a fairly natural process and one I'm not completely opposed to."

If you ignore the circumstances of American-Iraqi negotiations, then sure, this is a completely normal contract process that both parties will come out of stronger than before.

Posted by: A Different Matt on June 30, 2008 at 2:43 AM | PERMALINK

Hell! Mr. Capitalism himself ignores all graft, billions lost, blatant over-charging, and continues to give out non-competetitive contracts on cost-plus basis to his favorite uncles' company 5 years on.

Who needs efficiency?

Or capitalism?

Or competition?

And all on the national credit card.

Really, really nice job.


Posted by: notthere on June 30, 2008 at 3:16 AM | PERMALINK

Here's a piece of news that will surprise exactly no one:

I am so unsuprised.

Posted by: Swan on June 30, 2008 at 3:45 AM | PERMALINK

The well oiled continue to be oiled well.

Posted by: Shag from Brookline on June 30, 2008 at 7:09 AM | PERMALINK

When did war profiteering become acceptable U.S. government policy? We are well and truly fucked as a nation.

Click here to hear George Carlin’s take on why the U.S. likes war.

Posted by: The Conservative Deflator on June 30, 2008 at 7:46 AM | PERMALINK

The president's words to Arab leaders in January of this year: "The entrepreneurial spirit is strong."
War-profiteering, bags of dirty tricks, and the willingness to sacrifice lives of Iraqis and American soldiers for the almighty dollar: for Bush's cronies and donors--the oil companies.

And the American economy is at their mercy.

Posted by: consider wisely always on June 30, 2008 at 8:07 AM | PERMALINK

> This occurs every day in the United States. Why
> should Iraq be any different? I'm not suggesting
> that Iraqis don't have the wherewithal to draft
> and complete their own contracts, but this seems
> like a fairly natural process and one I'm not
> completely opposed to.

I actually have seen a situation where a company seeking to be acquired allowed the potential acquirer to write the first draft of the contract. Surprisingly, the end result was that the selling family was stripped of everything their parents and grandparents had worked to build and the acquiring company took full control for pennies on the dollar. Strange that.

Dakota: if you really do go into negotiations expecting those with opposing interests to "help" you draft the contract, please let me assist you with your next large financial transaction. I have some tuition payments due.


Posted by: Cranky Observer on June 30, 2008 at 8:13 AM | PERMALINK

Inevitably the invasion moves into another phase!

Posted by: capitalistpig on June 30, 2008 at 8:29 AM | PERMALINK

I think there are two issues here.

--The Iraqi government may well need help drafting a modern oil contract, and using somebody else's template is a time-honored way of not having to hire someone to do the work.

--The fact that it is the US government providing the templates and advice suggests our advice may be slanted toward our national interest. (Although this administration keeps doing things against our national interest--but not against oil companies' interests.)

Posted by: anandine on June 30, 2008 at 9:00 AM | PERMALINK

I am impressed with the U.S. lawyers who took the time to become fully conversant with Iraqi law so they could draft legally binding contracts. Certainly the contracts must contain clauses holding ExxonMobile, etc., workers harmless if they rape or kill Iraqi citizens.

Posted by: Mudge on June 30, 2008 at 9:20 AM | PERMALINK

So, Michael Moore was right?

Posted by: Steve Paradis on June 30, 2008 at 9:35 AM | PERMALINK

Somehow I have the feeling that if Ron Brown and Lloyd Bentsen were out assisting U.S. oil companies negotiate contracts with foreign governments, that would be touted as evidence of the brilliance of the Clinton administration.

Posted by: y81 on June 30, 2008 at 10:09 AM | PERMALINK

Oh Boy:

Consultants said the advice was necessary because the Oil Ministry, like other sectors of the Iraqi government, has experienced an exodus of qualified employees and lacks lawyers schooled in drawing up contracts.

and this:

The contracts are expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron, as well as to several smaller oil companies. - and if Iraq doesn't comply, what happens?

And if Big Oil is NOT award on Monday will Seymour M. Hersh's threat go into action? Nice timing Hersh! Don't see how bombing Iran's energy plant would help matters very much, not when it comes to stablity for Western oil in Iraq.

So like I said before, Iran is known to NOT do business with Western oil companies and to have stated that they didn't NEED to do business with Western Oil,(much like the late Saddam also insisted), which means that Iran is most likely advising Iraq to do likewise, nationalize not privatize, after all it would only be in the best interst of Iraq to get Iraqis working again, and keep the infidal out, at all cost, after all, it is only 6 months left to freedom, and Bushie out of office. This works of course only IF Obamie does indeed get us out of war in Iraq.

And the "no-bid" oil contracts (and why are these contracts being calling "no-bid," because these contracts are not with our government but are US business contracts with Iraqis.) Are Iraqis not allowed to change ANY part of these contract deals, NOT allowed to reject any of it? Is it the all or nothing thing or even death befall if you don't sign? A deal that is held to ransom, blackmail, or extortion – is these "no-bid" word a “kind” way of saying do this or the Bushie will break some Iraq Oil Ministry leg, or worse, a Ministry member might end up in Bushies extraordinary rendition program and never be found again?

Bush and Cheney really are a couple of very nasty people and NOBODY should mistake them for anything else. They look to be very much the top members the this called shadow government that does things the ugliest, nastiest way possible.
I can see why Nancy hesitates to impeach these two, fear works in mysterious ways.

Posted by: Me-again on June 30, 2008 at 10:11 AM | PERMALINK

The hidden danger here, especially for Obama, is that this "legitimizes" the IOCs (International Oil Cos) in Iraq. Now Republiks can taunt Obama for not protecting US interests abroad, if he pulls out troops from Iraq.

This is why McCain wants US troops there for upto 100 years. Basically, Iraqis have had their dictator replaced by a colonial power. This time they will have to oust the tyrants on their own. I wish them good luck.

Posted by: jimvj on June 30, 2008 at 10:17 AM | PERMALINK

Fellow americans, we have been played for fools.
High oil prices make our occupation of Iraq an EASY SELL for our corrupticians to make to a desperate public. Look at all the news coming out today about Iraqi oil fields ramping up production.

Just picture all the gas guzzling fools out there suddently realizing what a grand idea this has been. We'll all be able to keep driving our hummer to the corner for a quart of milk.

Posted by: jman on June 30, 2008 at 11:04 AM | PERMALINK

The occupation of Iraq and the return of the same oil companies that made up the original pre-nationalization Iraqi Petroleum Company is a restoration of property rights and of Western resource control.

Moves toward nationalization of Iraqi oil had been going on since the pro-British monarchy was overthrown by Abd al-Karim Qasim in 1958. The final broad nationalization in June 1972 was, in part, retribution against the West and particularly the United States for its support of Israel in 1967. This game culminated in the Arab oil boycott in 1973. Many people have pointed out how Dick Cheney seems to be seeking a restoration of an imagined pre-Nixonian unitary executive and how he is a continuation of the Nixon ethos. But this is not the only happening of the 1970's that Cheney remembers. This is a restoration Regency. Strategically the Arabs- and particularly hostile governments- must never be allowed to control the oil especially at a time of high demand and decreasing resources.

The imperial dream for the Middle East- we call our neo-imperialists "neocons"- is to defeat anti-Western nationalism. But the greedy part of imperialism always undermines the liberal part. It always seems to the natives that the blessings of liberty are meant not for them but for Englishmen, or Frenchman, or Americans who are fee to take local resources and send the profits back home. The blessings of liberal empire and limited home rule are punctuated by usurpations and brutal oppression of opposition. If the US stays in Iraq it will have to resort to brutal oppression as waves of nationalism push back against the Yankee occupation. It already goes on against al Sadr.

Posted by: bellumregio on June 30, 2008 at 12:06 PM | PERMALINK

An update on this story:

Iraq Fails to Sign Contracts With Global Oil Majors
Monday, June 30, 2008
Agence France Presse

Iraq said on Monday it has failed to sign technical support agreements with global oil majors which were aimed at helping boost the war-torn country’s oil production.0630 08

Iraq is negotiating with Shell, BP, ExxonMobil, Chevron and Total, and a consortium of other smaller oil companies, Oil Minister Hussein al-Shahristani said at press briefing.

“We did not finalise any agreement with them because they refused to offer consultancy based on fees, as they wanted a share of the oil,” he said.

“The TSAs (technical support agreements) are only simple consultancy contracts to help us raise the production during the interim period” before the ministry enters into long-term contracts to develop the oil and gas fields.

Last week, oil ministry spokesman Asim Jihad told AFP that it would sign the support contracts on Monday and award longer term deals to 41 other energy companies.

Iraq wants to ramp up output by 500,000 barrels per day from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion in March 2003.

Exports of 2.11 million bpd currently form the bulk of the war-torn nation’s revenues, and the oil ministry is keen to raise capacity over the next five years to 4.5 million bpd.

Iraq’s crude reserves are estimated at about 115 billion barrels, but it is sorely lacking in infrastructure and the latest technology to which it was denied access under years of international sanctions after the 1991 Gulf War.

Interesting word choice of "failed" in the headline and first sentence, when what clearly occurred is not a "failure" by Iraq, but a "refusal" to sign off on the deal -- because the western oil corporations would not undertake consulting for fees, but demanded a share of the oil as well.

Posted by: SecularAnimist on June 30, 2008 at 12:43 PM | PERMALINK

Yes. I'm betting the detailed instructions will mesh very well with the detailed instructions in the Energy plan Dick and his pals from the same oil companies concocted in secret on our behalf.

Posted by: Zane Safrit on June 30, 2008 at 6:55 PM | PERMALINK

Good discussion.

Bush and the GOP--anti-intellectuals. ENOUGH IS ENOUGH.

Here's what happened in the Congress this past week--a feature on which The Nation Magazine reports:

"...However, the hotly contested bill (HR 6251) failed to garner a two-thirds majority. It would have required energy companies to develop oil and natural gas on federal leases, an effort to combat soaring gas prices. Rep. Edward J. Markey told the Times, "After today's vote, the G.O.P. now officially stands for the Gas and Oil Party."

Posted by: consider wisely always on June 30, 2008 at 7:59 PM | PERMALINK

More Godfather: "Mikey, you don't buy ME out, I buy YOU out...": Mo Green, who then later takes a bullet through the eye. You get an offer you can't refuse? - well, you take the offer.

Posted by: barrisj on June 30, 2008 at 11:28 PM | PERMALINK

Funny, but I find myself rooting for the brown-skinned people we are over there "democratizing".

Iraq is saying "no" to the Bush/Cheney adminstration. They are the only ones to do this. Not Congress, not any conservative, nor religious leader, nor cooler global heads have said "no" to these two pampered sonofabitches.

Well good. Now the evidence is in and we are finally allowed to swallow the authentic reasons the War on Terror moved over to Iraq. Now we all know what this war is really about. Now we know...and still we will do nothing. Even We, the People have been reduced to just waiting Bush/Cheney out, hiding behind our own problems and our own meager concerns, when the entire planet knows that what is going on overseas is wrong, wrong, wrong.

Duh. Bush/Cheney aren't in Iraq for democracy or that so high a purpose of ridding the world of terror, they are facilitating an oil grab by already disgustingly rich oilmen from a privilaged country.

But everyone be silent now, least Bush/Cheney realize we are all on to them. My disappointment and grief is crushing on so many levels...

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