With democracy will come the spoils of war. Many businesses are set to join the Iraqi bonanza. “No country in the region has more business-generating potential than Iraq”, states the Rebuild Iraq 2005 conference brochure, set to be held in Jordan next April. “Soaring demand for materials and technology in key sectors for the Iraqi economy may well exceed $150 billion in the long-term. In the medium term, $60-70 billion will be needed to rebuild the country”.

A denial of history

But whilst there will be money to be made rebuilding Iraq’s infrastructure destroyed by fourteen years of sanctions and nearly two years of war, oil is the real jewel in Iraq’s crown. It is also the reason that many people believe America and Britain went to war. It is the rumour that Bush and Blair have long tried to dispel. “The idea that this is about oil for us is absurd. If all we wanted was greater oil supplies we could probably do a deal with Iraq or any other country on that basis,” argued Tony Blair on the Arabic service of Monte Carlo Radio in November 2002. 

Speaking a month later, Donald Rumsfeld was asked whether the war was about oil: “It just isn't”, he replied. “There--there--there are certain things like that, myths that are floating around. I'm glad you asked. I--it has nothing to do with oil, literally nothing to do with oil”.

To deny that oil is even in the equation of Middle Eastern politics represents nothing more than a denial of history itself. Oil may not have been the only factor in the War, but it was clearly in the equation.  “Ask any oil executive in Texas about the real reason for Bush and Cheney's determination to overthrow Saddam Hussein and they will laugh. Oil, oil, oil is the reason, weapons of mass destruction are just a smokescreen”, said one leading oil and gas analyst interviewed by The Middle East journal, the same month as Blair’s broadcast in 2002.

For most of the last century, the geopolitics of the vast oil reserves of the Middle East have dominated the political landscape of the region. The colonising powers have long sought to control the reserves. During the First World War, in 1917, control of Iraqi oil reserves was considered a “first-class British war aim”. By 1925, the Iraqi government was forced to sign an agreement granting a concession to explore oil until 2000. It decreed that the company would remain British and its chairman would remain British. The fact that Iraqis were going to just receive royalties for their oil and not own it sowed the seeds of bitterness against the colonial powers for decades to come.

A target for the neo-cons

It was in 1972 that Iraqis nationalised the oil industry. The Arab Ba’ath Socialist Party, that Saddam Hussein headed, considered “liberating oil from the clutches of monopolistic companies” a “top priority”. Such was its importance that nationalisation was celebrated every year. It also made Hussein a target for the neo-conservatives in Washington, who now form the backbone of the Bush Administration, and who are linked to the oil industry.

On January 26 1998, the Project for the New American Century formed by hawkish right-wingers like Dick Cheney, Donald Rumsfeld, and Paul Wolfowitz, who would all take up senior positions in the Bush government, wrote to the then President Bill Clinton, urging "the removal of Saddam Hussein's regime from power". If Clinton failed to act, “the safety of American troops in the region, of our friends and allies like Israel and the moderate Arab states, and a significant portion of the world's supply of oil will all be put at hazard”. Three years before the terrorist attacks of September 11^th, Saddam was already a marked man.

The last great oil boom

Blair and Bush went to war to rid Saddam of his non-existent weapons of mass destruction, whilst promising Iraqi that oil would stay with the Iraqis. “The money from Iraqi oil will be yours; to be used to build prosperity for you and your families,” said Blair in April 2003.  But despite the promises, many of the world’s largest and most powerful oil companies have been in secret negotiations with the Iraqis to exploit the oil. To these oil companies, who are being forced into ever more remote regions to find oil, and who are beginning to alarm city investors by missing production targets, Iraq offers the last great oil boom.

So far the deals have been small, although still highly important. But the really significant production deals will not be signed until after the election, as any agreement before then could be open to a legal challenge as the government is seen by some as illegitimate and only an “interim” one.

“The important thing is what happens after the election”, says Greg Muttitt, an analyst at Platform, a research group specialising in the environmental and social impacts of the oil industry, based in London. “In relation to that the western majors have been positioning themselves in terms of getting hold of geological data and also developing relationships with the Iraqi oil Ministry”.

There have been indications of what is to come. In June 2004 a respected survey of “New Ventures” for oil companies ranked Iraq third out of 147 countries for level of interest expressed by oil executives.

These same oil executives have tried to distance themselves from being publicly linked to Iraq.

In August, the recruitment company Irvine International ran an advert on behalf of a client. “A person of Iraqi extraction with strong family connections and an insight into the network of families of significance within Iraq would be extremely desirable for this position” ran the advert. The client was of course hidden. It was for Shell.

In October Shell secured the “rare prize” to consult the Iraqis on gas fields. The deal was all about building relationships and gaining strategic access to key data. “It's impossible to invest there now for a variety of reasons, but we hope to build relationships through this initiative”, Piet Ruijtenberg, Iraq project manager for Shell Exploration and Production was quoted in the press. The deal led to speculation that it would improve Shell’s chances of developing the huge Ratawi field near Basra.

Then last month it was announced five companies had been shortlisted to evaluate the potential of the huge Kirkuk field in the north of Iraq. A similar number were shortlisted for the Rumaila oilfields in the south. “I hope we will award the contracts for both projects within a month”, Hazim Sultan, Iraq's oilfield development director told the Reuters news agency.

When the election is over, many of the world’s largest oil companies will be in a position to exploit Iraqi oil – not for Iraqis, but for their shareholders thousands of miles away. “Behind closed doors the future structure of the Iraqi oil ministry is being mapped out” argues Platform’s Greg Muttitt. “What the Iraqi Interim government is setting up is a structure where all of the new fields in the Western desert, which could be huge, all of those will go to western companies. The state oil company will be part-privatised. When Tony Blair says that decisions on Iraqi oil will be made by Iraqis, what he means is that the decisions on Iraqi oil will be made by Iraqis who want to give the oil reserves to the western companies”. 

For the oilmen, the election cannot come soon enough.