US Oil Companies Just Happened to Have Billions of Dollars To Invest

[G_j]

This excerpt from a new book by Canadian journalist Linda McQuaig argues that Washington made war in 2003 to control Iraq's vast oil reserves and privatize the region's oil production. The author provides details from an interview with Wall Street oil analyst Fadil Gheit and fresh analysis of the secret Cheney energy task force. As oil prices climb and battles over resources sharpen, McQuaig's well-written and freshly-researched piece is especially timely. (Toronto Star)
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http://www.globalpolicy.org/security/oil/2004/0920crude.htm

Crude Dudes

US Oil Companies Just Happened to Have Billions of Dollars They Wanted to Invest
in Undeveloped Oil Reserves

By Linda McQuaig*
Toronto Star

September 20, 2004

From his corner office in the heart of New York's financial district, Fadel Gheit keeps close tabs on what goes on inside the boardrooms of the big oil companies. An oil analyst at the prestigious Wall Street firm Oppenheimer & Co., the fit, distinguished-looking Gheit has been watching the oil industry closely for more than 25 years. Selling the modern world's most indispensable commodity has never been a bad business to be in ? particularly for the small group of companies that straddle the top of this privileged world. But never more so than now. "Profit-wise, things could not have been better," says Gheit, "In the last three years, they died and went to heaven .... They are all sitting on the largest piles of cash in their history."

But to stay rich they have to keep finding new reserves, and that's getting tougher. Increasingly it means cutting through permafrost or drilling deep underwater, at tremendous cost. "The cheap oil has already been found and developed and produced and consumed," says Gheit. "The low-hanging fruit has already been picked." Well, not all the low-hanging fruit has been picked. Nestled into the heart of the area of heaviest oil concentration in the world is Iraq, overflowing with low-hanging fruit. No permafrost, no deep water. Just giant pools of oil, right beneath the warm ground. This is fruit sagging so low, as it were, that it practically touches the ground under the weight of its ripeness.

Not only does Iraq have vast quantities of easily accessible oil, but its oil is almost untouched. "Think of Iraq as virgin territory .... This is bigger than anything Exxon is involved in currently .... It is the superstar of the future," says Gheit, "That's why Iraq becomes the most sought-after real estate on the face of the earth." Gheit just smiles at the notion that oil wasn't a factor in the U.S. invasion of Iraq. He compares Iraq to Russia, which also has large undeveloped oil reserves. But Russia has nuclear weapons. "We can't just go over and ... occupy (Russian) oil fields," says Gheit. "It's a different ballgame." Iraq, however, was defenceless, utterly lacking, ironically, in weapons of mass destruction. And its location, nestled in between Saudi Arabia and Iran, made it an ideal place for an ongoing military presence, from which the U.S. would be able to control the entire Gulf region. Gheit smiles again: "Think of Iraq as a military base with a very large oil reserve underneath .... You can't ask for better than that."

There's something almost obscene about a map that was studied by senior Bush administration officials and a select group of oil company executives meeting in secret in the spring of 2001. It doesn't show the kind of detail normally shown on maps ? cities, towns, regions. Rather its detail is all about Iraq's oil. The southwest is neatly divided, for instance, into nine "Exploration Blocks." Stripped of political trappings, this map shows a naked Iraq, with only its ample natural assets in view. It's like a supermarket meat chart, which identifies the various parts of a slab of beef so customers can see the most desirable cuts .... Block 1 might be the striploin, Block 2 and Block 3 are perhaps some juicy tenderloin, but Block 8 ? ahh, that could be the filet mignon.


..more..

[whistle]

1. Oh heavens, now where do you think all that money came from?

...Could not have been windfall profits, their costs are too high because those wicked OPEC nations have been charging such high prices for crude oil. But wait, the oil companies own much of those OPEC oil well, pipeline and shipping interests as well as the domestic refining , distribution and retail outlets. Oh, total monopoly through horizontal and vertical integration of the industry, something antitrust laws from the Teddy Roosevelt era were passed to prevent. How did those laws get overturned? Doesn't a federal tax on oil of say $1.00 per gallon make sense now? At least it could be used to pay down the federal debt and also invest in research and development of alternative forms of energy. Beats creating new oil billionaires whose only claim to such wealth is greed and favoritism.

[Tamyrlin79]

2. an oil tax just gets passed to consumer.

The oil barrons will still get rich on our more burdened backs.

[whistle]

3. Well so do corporate windfall profits and those aren't taxes...

...because of special depletion considerations and loopholes