SECRET U.S. PLANS FOR IRAQ'S OIL

By Greg Palast
BBC News World Edition
Thursday, March 17, 2005


Reporting for BBC Newsnight (London)


Why was Paul Wolfowitz pushed out of the Pentagon onto the World Bank?
The answer lies in a 323-page document, secret until now, indicating
that the allies of Big Oil in the Bush Administration have defeated
neo-conservatives and their chief Wolfowitz. BBC Television Newsnight
tells the true story of the fall of the neo-cons. An investigation
conducted by BBC with Harper's magazine will also reveal that the US
State Department made detailed plans for war in Iraq -- and for Iraq's
oil -- within weeks of Bush's first inauguration in 2001.


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Watch the Broadcast of this report
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The Bush administration made plans for war and for Iraq's oil before
the 9/11 attacks sparking a policy battle between neo-cons and Big
Oil, BBC's Newsnight has revealed.

Two years ago today - when President George Bush announced US, British
and Allied forces would begin to bomb Baghdad - protestors claimed the
US had a secret plan for Iraq's oil once Saddam had been conquered.

In fact there were two conflicting plans, setting off a hidden policy
war between neo-conservatives at the Pentagon, on one side, versus a
combination of "Big Oil" executives and US State Department "pragmatists."

"Big Oil" appears to have won. The latest plan, obtained by Newsnight
from the US State Department was, we learned, drafted with the help of
American oil industry consultants.


View Segments of Iraq oil plans


Insiders told Newsnight that planning began "within weeks" of Bush's
first taking office in 2001, long before the September 11th attack on
the US.

An Iraqi-born oil industry consultant, Falah Aljibury, says he took
part in the secret meetings in California, Washington and the Middle
East. He described a State Department plan for a forced coup d'etat.

Mr Aljibury himself told Newsnight that he interviewed potential
successors to Saddam Hussein on behalf of the Bush administration.

Secret sell-off plan

The industry-favoured plan was pushed aside by yet another secret
plan, drafted just before the invasion in 2003, which called for the
sell-off of all of Iraq's oil fields. The new plan, crafted by
neo-conservatives intent on using Iraq's oil to destroy the Opec
cartel through massive increases in production above Opec quotas.

The sell-off was given the green light in a secret meeting in London
headed by Fadhil Chalabi shortly after the US entered Baghdad,
according to Robert Ebel. Mr. Ebel, a former Energy and CIA oil
analyst, now a fellow at the Center for Strategic and International
Studies in Washington, flew to the London meeting, he told Newsnight,
at the request of the State Department.

Mr Aljibury, once Ronald Reagan's "back-channel" to Saddam, claims
that plans to sell off Iraq's oil, pushed by the US-installed
Governing Council in 2003, helped instigate the insurgency and attacks
on US and British occupying forces.

"Insurgents used this, saying, 'Look, you're losing your country, your
losing your resources to a bunch of wealthy billionaires who want to
take you over and make your life miserable," said Mr Aljibury from his
home near San Francisco.

"We saw an increase in the bombing of oil facilities, pipelines, built
on the premise that privatization is coming."

Privatization blocked by industry

Philip Carroll, the former CEO of Shell Oil USA who took control of
Iraq's oil production for the US Government a month after the
invasion, stalled the sell-off scheme.

Mr Carroll told us he made it clear to Paul Bremer, the US occupation
chief who arrived in Iraq in May 2003, that: "There was to be no
privatization of Iraqi oil resources or facilities while I was involved."

The chosen successor to Mr Carroll, a Conoco Oil executive, ordered up
a new plan for a state oil company preferred by the industry.

Ari Cohen, of the neo-conservative Heritage Foundation, told Newsnight
that an opportunity had been missed to privatise Iraq's oil fields. He
advocated the plan as a means to help the US defeat Opec, and said
America should have gone ahead with what he called a "no-brainer"
decision.

Mr Carroll hit back, telling Newsnight, "I would agree with that
statement. To privatize would be a no-brainer. It would only be
thought about by someone with no brain."

New plans, obtained from the State Department by Newsnight and
Harper's Magazine under the US Freedom of Information Act, called for
creation of a state-owned oil company favored by the US oil industry.
It was completed in January 2004, Harper's discovered, under the
guidance of Amy Jaffe of the James Baker Institute in Texas. Former US
Secretary of State Baker is now an attorney. His law firm, Baker
Botts, is representing ExxonMobil and the Saudi Arabian government.

View segments of Iraq oil plans



Questioned by Newsnight, Ms Jaffe said the oil industry prefers state
control of Iraq's oil over a sell-off because it fears a repeat of
Russia's energy privatization. In the wake of the collapse of the
Soviet Union, US oil companies were barred from bidding for the reserves.

Jaffe said "There is no question that an American oil company ...
would not be enthusiastic about a plan that would privatize all the
assets with Iraq companies and they (US companies) might be left out
of the transaction."

In addition, Ms. Jaffe says US oil companies are not warm to any plan
that would undermine Opec, "They [oil companies] have to worry about
the price of oil."

"I'm not sure that if I'm the chair of an American company, and you
put me on a lie detector test, I would say high oil prices are bad for
me or my company."

The former Shell oil boss agrees. In Houston, he told Newsnight, "Many
neo conservatives are people who have certain ideological beliefs
about markets, about democracy, about this that and the other.
International oil companies without exception are very pragmatic
commercial organizations. They don't have a theology."

A State Department spokesman told Newsnight they intended "to provide
all possibilities to the Oil Ministry of Iraq and advocate none".


Greg Palast's film - the result of a joint investigation by Newsnight
and Harper's Magazine - will broadcast on Thursday, 17 March, 2005.

You can watch the program online from Democracy Now!


Read the story in greater detail in the April issue of Harper's magazine.

Greg Palast is the author of the New York Times bestseller, "The Best
Democracy Money Can Buy." View his writings at www.GregPalast.com.

Leni von Eckardt contributed investigative research for this project.

For interviews, email us at contact(at)GregPalast.com

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