Cheney, Putin, and the Battle for Iraqi Oil

Posted by Cutler on August 13, 2007
Great Power Rivalry, Iraq, Russia

Vice President Cheney allegedly continues to beat the drum for war with Iran.  The McClatchy Washington Bureau reported as much last week:

Vice President Dick Cheney several weeks ago proposed launching airstrikes at suspected training camps in Iran run by the Quds force, a special unit of the Iranian Revolutionary Guard Corps, according to two U.S. officials who are involved in Iran policy.

The Bush administration has launched what appears to be a coordinated campaign to pin more of Iraq’s security troubles on Iran.

Last week, Lt. Gen. Raymond Odierno, the No. 2 U.S. military commander in Iraq, said Shiite militiamen had launched 73 percent of the attacks that had killed or wounded American troops in July. U.S. officials think that majority Shiite Iran is providing militiamen with EFPs, which pierce armored vehicles and explode once inside.

Cheney and Odierno appear to be particularly close allies.  Cheney, in his recent interview with Larry King, singled out Odierno for his service:

General Petraeus is a very impressive officer… I don’t want to put the whole burden on him… there are a lot of people working at it, too. General Ray Odierno, who is his number two, a superb officer. A man who spent about 28 months in Iraq himself so far, whose son served and lost an arm, who is dedicated — is just as dedicated as Dave Petraeus is to the success of this enterprise.

Perhaps all this anti-Iranian talk risks undermining the Bush administration’s relationship with Shiite-led political figures in Iraq.

But the White House appears to be working hard to maintain the image of a distinction between the Maliki government and the Iranian regime–even if neither Maliki nor the Iranians appear to put much stock in the distinction.  Al Jazeera reports:

When asked whether he thought al-Maliki shared his views on Iran, Bush said: “So the first thing I looked for was commitment against the extremists.

“The second thing is ‘does he [al-Maliki] understand with some extremist groups there’s connections with Iran’, and he does. And I’m confident…

“Now, is he trying to get Iran to play a more constructive role? I presume he is. But that doesn’t – what my question is – well, my message to him is, is that when we catch you playing a non-constructive role there will be a price to pay.”

The White House later clarified with Al Jazeera that Bush was referring to Iran when talking about a price to pay.

All of which goes to the central question: is Cheney secretly horrified by the Maliki government?  Is there anything to the old assertion from the Economist that Cheney was “said to favour an alternative Shia leader as prime minister”?

Or does Cheney share the enthusiasm for the Shiite-led Maliki government expressed by Right Zionists like Fouad Ajami and Reuel Marc Gerecht?

If there is any reason to believe that the latter is true, it might have something to do with the politics of Iraqi oil.

However closely–and provisionally–aligned Cheney may be to Right Zionists, his most consistent enduring commitments center on Great Power rivalry with Russia.

This has significant implications for US-Russian relations in Europe–i.e., Kosovo, missile shields, etc.–and the Caspian–i.e., Turkmenistan, Georgia, etc.

But it also may help clarify Cheney’s enthusiasm for the Sistani-backed regime in Iraq.

If the US invasion of Iraq was motivated, in part, by the desire to prevent Russia from winning access to Iraqi oil after the collapse of UN sanctions, then Cheney is being well served by his Shiite friends in Iraq.

I first made that argument in an April 2007 post entitled, “The US-Russian War in Iraq” in which I suggested that the details of the draft hydrocarbons law tended to leave Russian-backed companies–especially Lukoil–out in the cold.

Last week, Sistani-backed oil minister Hussain al-Shahristani confirmed Russian fears.

In meetings with Shahristani, Russia sought to use the promise of debt relief to win better terms for Lukoil.  According to Kommersant, that plan to make debt relief conditional appears to have crumbled:

It was Iraq’s Oil Minister Hussein al-Shahristani that announced yesterday the results of his Moscow meeting with Russia’s Industry and Energy Minister Viktor Khristenko. According to al-Shahristani, Russia confirmed it would fully execute Paris Club’s decision to write off the debt of Iraq and today’s concern is ensuring some technical procedures. Writing off is conditioned to nothing…

Paris Club raised the issue of writing off $140 billion from Iraq after the U.S. invasion of 2003. Russia pressed for conditioning its pardon to reviving the West Kurna-2 agreement but wasn’t backed up by other creditors. So, the agreement of 2004 spells out writing off 80 percent of amount due to Paris Club nations….

The agreement on Iraq’s debt will be inked till this year-end, Deputy Finance Minister Sergey Storchak announced not long ago. Hussein al-Shahristani was expected to deliberate on the terms of the deal in Moscow, but the minister arrived with no authority given to the effect. As a result, Russia was forced to confirm adherence to Paris Club commitments without additional conditions.

As noted in some press reports, Shahristani had a few nice words to say about Lukoil:

“Lukoil has done much in Iraq, has experience of working in our country, possesses vast data about Iraqi oil deposits. These temporary advantages raise the company’s chances for winning free and transparent oil tenders,” the minister said.

But this sweet talk tended to obscure the real issue of control over the enormous West Qurna fields.  The oil industry journal, Platts, explains:

Shahristani, who spoke at a press conference in Moscow, said Iraqi
oilfields currently in operation, including West Qurna, would fall under the
control of the national oil company.

“For the discovered fields where there are no risks involved…we do not
see any necessity for foreign companies to take control. We think the Iraqi
national oil company can do it with the cooperation with other oil firms,” he
said.

“All the discovered and producing fields will be assigned to the national
oil company, this includes West Qurna,” Shahristani said. “It is up to the
Iraqi national oil company to decide how it can develop that field.”

In other words, the West Qurna field will be under the political control of the national oil company under a Shiite-led, US-backed administration.

The Saddam-era deal had promised Lukoil commercial control.  RIA Novosti reports:

“Assigning oil fields to the National Oil Company means that the company will have the right to choose foreign companies under contract terms,” Hussain al-Shahristani told a news conference in Moscow….

Under the [Saddam-era] West Qurna deal, LUKoil held 68.5% and Iraq’s SOMO organization 25%.

In other words, Russia can forget about control.

As for the new fields, Shahristani has not ruled out the “necessity for foreign companies to take control.”

Could Cheney have found a better ally in Iraq?

Now, if he can deliver on his promise to get the oil legislation passed in September, Cheney should be able to sleep soundly…

Even as he allegedly dreams of war with Iran.

1 Comment to Cheney, Putin, and the Battle for Iraqi Oil

  • Certainly the exclusion of Russia from the oil spoils by the Shia Iraqi govt.may help Cheney sleep soundly.US citizens,however,may not sleep so sound when they realise that Cheney is rather less cuddly and avuncular than they thought.He is the figurehead and master-planner for the Military Industrial Complex hijack of any semblance of democracy Americans might naively have thought they had left.

    Under Gerald Ford’s Presidency,Cheney with Rumsfeld and Wolfervitz were early initiators of the early fight to draw down Congressional oversight of their executive machinations and establish an Imperial presidency.Americans,at least those who are still sensient beings,might now consider just how compatible the country’s militarism and foreign imperialism are with democracy.Rumsfeld and Wolfervitz have gone but the Cheney acolytes and their MIC sponsors are still on side.

    As the US desperately seeks to position itself vis a vis Israel and the Saudis the regional covert ops.(especially against Iran)are largely paid for by the latter and of course free of Congressional oversight.

    When Cheney has finally got his good night’s sleep with Russia excluded from oil spoils he will have recourse to the services of his friend,number 2 General in Iraq,Lt.Gen.Odierno.He is in charge of the US 4th Infantry Division whose attempts to pacify the Northern Sunni triangle around Tikrit were reported in the Washington Post in July 2006.The paper’s staff writer,Thomas E Rickes,reported widespread abuses by the soldiers under Odierno’s command of Iraqi civilians.

    Given Cheney’s plans for martial law in the aftermath of 9/11 I think he and Odierno will work rather well together…….on their fellow US citizens!

    Cheney represents that strand in elite opinion which is aghast at the prospect of losing control to democratic grassroots movements inflamed by two messy and failing wars.Such movements were they to materialise in any substantial form and seem to jeopardise MIC priorities would likely be crushed by Cheney and Odierno just as brutally as they were in the Sunni triangle.

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