We learned a couple of weeks ago that several Western oil companies — Exxon Mobil, Shell, Total, Chevron, and BP — are putting the final touches on no-bid contracts with Iraq’s Oil Ministry to service Iraq’s largest fields. More than 35 years after Saddam Hussein rose to power and threw the companies out, the Oil Ministry completed these lucrative and “unusual” deals at a convenient time.
As Daniel Altman put it: “Imagine. At the precise moment when demand for oil was the highest in history, a recently democratized country with enormous reserves had the chance to sell extraction contracts to the highest bidder. This was a country that desperately needed the revenue to help rebuild its schools, power grid and water supply after a long internal conflict. So why did it hand out the contracts with no auction at all?”
And Andrew Sullivan answered the rhetorical question: “Because the US told them so.”
We didn’t know for sure, however, that this was the case. It certainly looked like the Bush administration had helped make the no-bid deals happen, but we didn’t have confirmation of the U.S. role. That is, until today.
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.
The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism.
It’s a helpful reminder that it’s hard to be too cynical when expecting the worst of the Bush administration.
The White House has, of course, denied a role in steering the Iraqis. “Iraq is a sovereign country, and it can make decisions based on how it feels that it wants to move forward in its development of its oil resources,” Bush press secretary Dana Perino said.
But then pesky details keep getting in the way.
[A]ny perception of American meddling in Iraq’s oil policies threatens to inflame opinion against the United States, particularly in Arab nations that are skeptical of American intentions in Iraq, which has the third-largest oil reserves in the world.
“We pretend it is not a centerpiece of our motivation, yet we keep confirming that it is,” Frederick D. Barton, senior adviser at the Center for Strategic and International Studies in Washington, said in a telephone interview. “And we undermine our own veracity by citing issues like sovereignty, when we have our hands right in the middle of it.”
A senior State Department official conceded that administration lawyers provided “detailed suggestions” on drafting the contracts. To which Kevin responded, “I think that’s what Michael Corleone called it too.”