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Fuel on the Fire book: The war for Iraqi oil beyond the cliché

A new book about the invasion of Iraq and its aftermath should trouble even the most ardent liberal interventionist. Author Greg Muttitt talks to Derek Brower

ASSUMING everything goes as planned, Iraq will hold its fourth oil and gas licensing round in January. Proof, believe some commentators, that the country is on a steady path to normality and prosperity.

Billions of dollars are being invested in Iraq’s upstream. The government says three earlier auctions since 2009 have laid the foundations for rapid, ambitious oil-production growth that will take output to at least 12 million barrels a day – making the country the world’s largest oil producer. The next licensing round will make Iraq a regional gas powerhouse. If the plans come off, it will rival Saudi Arabia in global oil markets and be a wealthy democracy in a region of tyrants and political turmoil.

The other Iraq story

At least that’s what the Iraq story in the mainstream press has become in recent months. Eight bloody years after the US and UK led an invasion of the country, Western publics have tired of the other Iraq story, the one about violence, instability and the catastrophic miscalculations of George Bush and Tony Blair. Many newspapers have shut their Baghdad bureaux and security firms are still doing a brisk trade, yet even the most ardent activists seem to have lost their sense of outrage.

But not Greg Muttitt. “I was furious about the war,” he tells Petroleum Economist. And, it is obvious, the anger still burns. The war – and especially the lies told by Western governments before the invasion in 2003 – enraged many people.

But Muttitt didn’t just take to the streets in what were popular, but ultimately futile, protests. As a campaigner focused on oil and governance issues for Platform, a UK charity, he dug around. He mastered the details and, six years after shock and awe hit the streets of Baghdad, wrote an account of the invasion, the occupation, the aftermath – and the central role of oil in the whole sorry history.

A war for oil

Most interpretations of the Iraq invasion said it was a war for oil. Muttitt agrees. But his book, Fuel on the fire: Oil and politics in occupied Iraq, goes well beyond the cliché.

The invasion was not so straightforward as to be an annexation of the country’s reserves for US and UK firms. “American companies getting contracts isn’t irrelevant to the US government,” he says. But that doesn’t mean the aims were so narrow; the motivations of the neocons were much broader, believes Muttitt.

With a new, friendlier regime in Baghdad and generous contractual terms to attract upstream investment, Iraq’s oil reserves would be let loose on the market, blowing apart Opec’s quota system. Iraq would be a Trojan Horse inside the cartel.

Fuel on the fire

The book gives a forensic account of how this ambitious aim played out in Baghdad. Fuel on the fire reads like a tragedy, with ordinary Iraqis the victims. The villain of a piece that features many dark and dislikeable characters is Paul Bremer – the US diplomat who governed occupied Iraq between 2003 and 2004 from behind the high walls of Baghdad’s green zone. Bremer has written his own book about the period. The “utter contempt for Iraqis leaps out from every page of it”, says Muttitt.

It’s the opposite in Muttitt’s story. In it, the heroes are the Iraqis who managed the country’s oil sector during the Saddam Hussein era. Many were immediately discarded after the conquest. Their story has been missing from the Western accounts of the war. Muttitt’s book changes that.

That those voices haven’t been much heard before may be a legacy of how the things transpired after the invasion. It was striking, said Muttitt, how announcements and information about Iraq’s oil industry would be made in hotels in London or Abu Dhabi to Western journalists and executives – with little effort made to convey the news back to the Iraqi populace that, in theory at least, owned the oil.

Popular discontent

That disconnect began to end only in 2007, when the debates about the country’s oil law triggered a groundswell of trade-union and popular discontent. As privatisation of Iraq’s industry became a real prospect, Iraqis found their voice. The US grew belligerent, even threatening to pull the plug on the government of Nouri al-Maliki if he didn’t enact the law. But he didn’t and his government survived.

Muttitt believes the licences signed with foreign companies since then are weighted heavily in their favour and against Iraqi interests – but the failure to pass an oil law as the US wished showed that Iraq’s popular will had begun to influence its politics.

The squabbles over the oil law also showed fundamental divisions within Iraq itself. On this subject, Muttitt is also scathing. Whether by design or not, an outcome of the US involvement in Iraq was the splintering of the country into sectarian groups. The constitution, enacted with unseemly speed and with little public consultation, entrenched the divisions.

Greg Muttitt, author of "Fuel on the Fire"

Yet, says Muttitt, Iraqis themselves scarcely recognised this sudden designation into Sunni, Shi’a and Kurdish groups. By treating them as distinct entities with conflicting ambitions, the occupiers exacerbated whatever frictions had existed before the war. Such internal conflict, artificially generated, cost many thousands of lives.

Strategy? What strategy?

And the US could scarcely get its strategy straight, either. Even while the Bush White House was pressing for an oil law that would enshrine revenue sharing between the different parts of Iraq, one of the president’s friends signed an exploration and production contract with the Kurdistan Regional Government, virtually killing any hopes that the law would pass.

Such mixed messages were echoed across US politics, which was up to its eyeballs in Iraq. Peter Galbraith, a US diplomat and outspoken advocate for an independent Kurdish state was eloquently arguing in prominent US op-ed pages that the country should stand by its allies in Iraq’s north – while at the same time quietly amassing a large stake in one of the firms investing in the region.

In Congress, Joe Biden, who would become Barack Obama’s vice-president, was talking of Iraq’s partition. As menacing as Dick Cheney, Donald Rumsfeld and others seemed to their critics, the war party often looked more like the gang who couldn’t shoot straight.

Context and detail

But then much of the story of the US/UK invasion and occupation is a catalogue of confused aims, catastrophic errors, corruption and cynical politics. Muttitt’s book is an excellent guide to it all; a chronological account that gives the reader context as well as detail.

It’s full of scoops, too. The technical-service contract BP signed for the Rumaila oilfield in 2009 – seen at the time to give the UK supermajor relatively meagre fee of $2 a barrel for development – contained undisclosed terms that made the deal much sweeter. Iraq would pay for security and compensate BP for any lost production, Muttitt writes. That would leave the central government paying BP if Iraq agreed to any future Opec quota cut.

That disclosure, alongside others showing the extent of oil companies’ discussions with the UK government in the run up to the invasion and after it, plainly support Muttitt’s war-for-oil thesis. Twice in the book he quotes US State Department advisor Robert Ebel: “What did Iraq have that we would like to have? It wasn’t the sand.”

“This won’t be the last resource war,” says Muttitt, explaining why his book matters. Libya may already have proved him right. The legacy of Iraq and the many blunders of the US and UK hangs over Nato’s conflict in North Africa, and the way the Western nations are pursuing their agenda in another oil-rich state. Muttitt’s book should trouble even the most ardent liberal interventionist.

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