Gauging Promise of Iraqi Oil
WASHINGTON — Maybe it's a coincidence, but American and British oil companies would be long-term beneficiaries of a successful military offensive led by the United States and Britain to remove Iraqi President Saddam Hussein.
Industry officials say Hussein's ouster would help level the playing field for U.S. and British firms that have been shut out of Iraq as Baghdad has negotiated with rivals from other countries -- notably France, Russia and China, three leading opponents of war.
A post-Hussein Iraq also would be a bonanza for the U.S.-dominated oil-services industry, which is in the business of rehabilitating damaged infrastructure, reversing declining output from aging fields and providing essential support work to drillers and explorers. A leader in that industry is Halliburton Co., where Dick Cheney was chief executive before becoming vice president.
The confluence of foreign policy objectives and commercial interests is fueling suspicions that U.S. and British war plans are motivated in part by a thirst for Iraqi oil. Those concerns would be magnified, experts caution, if Washington winds up calling the shots in a postwar Baghdad.
"All over the world, people will be watching very carefully," said Issam Al-Chalabi, who ran Iraqi National Oil Co. for four years and served as Hussein's oil minister for three.
"Even if they give only 10% of the work to Americans, people will say the Americans are being favored if there is supervision by the United States," said Al-Chalabi, now a consultant in Amman, Jordan. "But let the Iraqis decide, and no one can say they've been under pressure, even if they give 50% to American companies."
Experts say it would make sense for U.S. and British firms to get a significant share of any repair and development jobs in Iraq, because they are such major players in the global industry with arguably the best technology and professional expertise. That would be recognized, analysts say, even if the United States left all postwar decision-making to Iraqis.
And with the door open to companies such as Exxon Mobil Corp. of Irving, Texas, and Royal Dutch/Shell Group of London, the losers could be the French, Russian and Chinese oil companies that have either signed contracts or negotiated preliminary agreements to drill in Iraq.
