Saturday, October 21, 2006

Mon dieu! How Totally AWB and BHP!

Total backs chief on Iraqi oil money
The French oil company Total on Friday rallied to the defense of its designated chief executive, Christophe de Margerie, after he was taken into custody and questioned about possible illegal payments for Iraqi oil.

"The judge has to prove that he is or is not guilty, and we think he's not guilty," said a Total spokeswoman, Catherine Enck. "Regarding the succession procedure, nothing will change."

She said that Total remained scheduled to elevate Margerie, who is head of exploration and production, to the top job in February.

Margerie, 55, and a former Total executive, Bernard de Combret, 63, were released Thursday on bail after being held for 48 hours. The two men also underwent questioning by Judge Philippe Courroye, who is investigating possible kickbacks linked to the oil-for-food program in Iraq that was supervised by the United Nations.

n France, a former interior minister, Charles Pasqua, is among those already under formal investigation.

Enck said Total had negotiated with Saddam to develop the oil-rich Majnoon and Nahr Umar fields in southern Iraq, the site of the world's third- largest oil reserves after Saudi Arabia and Iran.

She insisted, however, that the company had never signed contracts with Saddam's regime.

"Before the embargo, when Elf and Total were separate, each had a long history of cooperation with Iraq and good knowledge of resources," Enck said, adding that development of the fields could only have gone ahead once the sanctions were lifted.

"The group has never purchased, either directly or indirectly, oil that has been smuggled illegally from Iraq," Total said in a statement on its Web site.

A Citigroup analyst, Jonathan Wright, brushed off the seriousness of the development to Total, writing in a research note that he expected business as usual at the company.

But anti-corruption campaigners said the move against Margerie could be a sign of determination among the authorities in some countries to clean up the way business is done in the developing world - and in particular extractive industries like oil, gas and mining.

"What has happened clearly shows that some countries are working on these issues regarding oil sales, perhaps a bit silently, and in the shadows," said Patrick Moulette, the head of the anti- corruption division of the Organization for Economic Cooperation and Development in Paris. "But the work continues."

Sarah Wykes, an official at Global Witness, a group based in London that seeks to uncover corruption in the natural resource trade, said the sale of resources like oil was often a way for intermediaries and corrupt officials to make money.

"This same kind of architecture of corruption is being replicated," said Wykes, referring to similar problems in parts of Africa. "We are very interested in finding out whether Judge Courroye will be successful because then I would hope that there will be some more deterrents to the way these deals are done."

Total traces its roots to the creation in 1924 of the Compagnie Française des Pétroles, one of the original shareholders in the Iraq Petroleum Co., which discovered an oil producing field near Kirkuk, Iraq, in 1927.

A string of French governments also have had a long history of close ties with Iraq, and French companies have sold Iraqis military equipment, pharmaceuticals and automobiles.

Enck, the Total spokeswoman, said conditions in Iraq were currently not safe enough to do business there. But she said the company "would like to have partnership and cooperation when the security situation [and the US overlords] allows."

Alertnet via Al-Jazeerah has its own particular view of Iraq oil.
Bush's Petro-Cartel Almost Has Iraq's Oil, Part II
With 140,000 U.S. troops on the ground, the largest U.S. embassy in the world sequestered in Baghdad's fortified "Green Zone" and an economy designed by a consulting firm in McLean, Va., post-invasion Iraq was well on its way to becoming a bonanza for foreign investors.But Big Oil had its sights set on a specific arrangement -- the lucrative production sharing agreements that lock in multinationals' control for long terms and are virtually unheard of in countries as rich in easily accessible oil as Iraq.
The occupation authorities would have to steer an ostensibly sovereign government to the outcome they desired, and they'd have to overcome any resistance that they encountered from the fiercely independent and understandably wary Iraqis along the way. Finally, they'd have to make sure that the Anglo-American firms were well-positioned to win the lion's share of the choicest contracts.

... In this case, massive, crushing debt run up by a dictator who treated himself and his cronies to palaces and other luxuries, spent lavishly on weapons for Iraq's war with Iran -- fought in part on behalf of the United States -- and owed Kuwait billions of dollars in reparations for the 1990 invasion.

To put Iraq's foreign debt in perspective, if the country's economy were the size of the United States', then its obligations in 2004, proportionally, would have equaled around $55 trillion, according to IMF figures (and that doesn't include reparations from the first Gulf War).

The largest chunk of debt, $120 billion, was owed to the Paris Club, a group of 19 industrialized nations. Baker negotiated a deal whereby the Paris Club would forgive 80 percent of Iraq's debt, but the catch -- and it was a big one -- was that Iraq had to agree to an economic "reform" package administered by the International Monetary Fund, an institution dominated by the wealthiest countries and infamous across the developing world for its painful and unpopular Structural Adjustment Protocols.

The debt would be written off in stages; 30 percent would be cancelled outright, another 30 percent when an elected Iraqi government accepted an IMF structural reform agreement and a final 20 percent after the IMF had monitored its implementation for three years. This gave the IMF the role of watchdog over the country's new economy, despite the fact that its share of the country's debt burden was less than 1 percent of the total.

Among a number of provisions in the IMF agreement, along with privatizing state-run companies (which resulted in the layoffs of an estimated 145,000 Iraqis), slashing government pensions and phasing out the subsidies on food and fuel that many Iraqis depended on, was a commitment to develop Iraq's oil in partnership with the private sector.

In an investigation for the Nation, Naomi Klein discovered that Baker had pursued his mission with an eye-popping conflict of interest. Klein discovered that a consortium that included the Carlyle Group, of which Baker is believed to have a $180 million stake, had contracted with Kuwait to make sure that the money it was owed by Iraq would be excluded from any debt-relief package. When Baker met with the Kuwaiti emir to beg forgiveness for Iraq's odious debt, he had a direct interest in making sure he didn't get it.

Another major creditor was Saudi Arabia. The Carlyle Group has extensive business dealings with the kingdom and Baker's law firm, Baker Botts, was representing the monarchy in a suit brought by the families of the victims of 9/11.

Phillip Carroll, a former chief executive with Royal Dutch/Shell and a 15-member "board of advisors" were appointed to oversee Iraq's oil industry during the transition period. According to the Guardian, the group "would represent Iraq at meetings of OPEC." Carroll had been working with the Pentagon for months before the invasion -- even while the administration was still insisting that it sought a peaceful resolution to the Iraq crisis -- "developing contingency plans for Iraq's oil sector in the event of war." According to the Houston Chronicle, "He assumed his work was completed, he said, until Defense Secretary Donald Rumsfeld called him shortly after the U.S.-led invasion began and offered him the oil adviser's job." Carroll, in addition to running Shell Oil in the United States, was a former CEO of the Fluor Corp., a well-connected oil services firm with extensive projects in Saudi Arabia and Kuwait, and at least $1.6 billion in contracts for Iraq's reconstruction. He was joined by Gary Vogler, a former executive with ExxonMobile, in Iraq's Office of Reconstruction and Humanitarian Assistance.

After spending six months in the post, Carroll was replaced by Robert E. McKee III, a former ConocoPhillips executive. According to the Houston Chronicle, "His selection as the Bush administration's energy czar in Iraq" drew fire from congressional Democrats "because of his ties to the prime contractor in the Iraqi oil fields, Houston-based Halliburton Co. He's the chairman of a venture partitioned by the … firm."

The administration selected Chevron Vice President Norm Szydlowski to serve as a liaison between the Coalition Provisional Authority and the Iraqi Oil Ministry. Now the CEO of the appropriately named Colonial Pipeline Co., he continues to work with the Iraq Energy Roundtable, a project of the U.S. Trade and Development Agency, which recently sponsored a meeting to "bring together oil and gas sector leaders in the U.S. with key decision makers from the Iraq Ministry of Oil."

Terry Adams and Bob Morgan of BP, and Mike Stinson of ConocoPhillips would also serve as advisors during the transition.

After the CPA handed over the reigns to Iraq's interim government, the embassy's "shadow" oil ministry continued to work closely with the Iraqis to shape future oil policy. Platform's Greg Muttit wrote that "senior oil advisers -- now based within the Iraq Reconstruction Management Office (IRMO) in the U.S. Embassy ... included executives from ChevronTexaco and Unocal." After the handover, a senior U.S. official said: "We're still here. We'll be paying a lot of attention, and we'll have a lot of influence. We're going to have the world's largest diplomatic mission with a significant amount of political weight."

The majors have also engaged in good, old-fashioned lobbying. In 2004, Shell advertised for an Iraqi lobbyist with good contacts among Iraq's emerging elites. The firm sought "a person of Iraqi extraction with strong family connections and an insight into the network of families of significance within Iraq." According to Platform, just weeks after the invasion, in a meeting with oil company execs and Australian Foreign Minister Alexander Downer in London, former British Foreign Secretary Sir Malcolm Rifkind promised to personally lobby Dick Cheney for contracts on behalf of several firms, including Shell.

Meanwhile, major oil firms were positioning themselves so that they'd have the best contacts in the new government. According to the Associated Press, "The world's three biggest integrated oil companies" -- BP, ExxonMobil and Royal Dutch/Shell -- "struck cooperation or training deals with Iraq" in 2005. "It's a way to maintain contact and get the oil officials to know about them," former Iraqi Oil Minister Issam Chalabi told the AP. And it seems to have worked; in May, Iraq's current oil minister, Husayn al-Shahristani, said that one of his top priorities would be to finalize an oil law and sign contracts with "the largest companies."

Washington has its hands all over the drafting of that law. Early on, in 2003, USAID commissioned BearingPoint, Inc. -- the new name for the scandal-plagued Arthur Anderson Consulting -- to submit recommendations for the development of Iraq's oil sector. BearingPoint was the firm that designed the country's economic transformation under a previous USAID contract, so it was no surprise that its report reinforced the preference for PSAs that "everybody [kept] kept coming back to" during meetings of the State Department's "Future of Iraq Project."

In February, just months after the Iraqis elected their first constitutional government, USAID sent a BearingPoint adviser to provide the Iraqi Oil Ministry "legal and regulatory advice in drafting the framework of petroleum and other energy-related legislation, including foreign investment." According to Muttit, the Iraqi Parliament had not yet seen a draft of the oil law as of July, but by that time it had already been reviewed and commented on by U.S. Energy Secretary Sam Bodman, who also "arranged for Dr. Al-Shahristani to meet with nine major oil companies -- including Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips -- for them to comment on the draft."

All of these points of pressure are only what we can see in the light of day.

Tracback BHP's oil interests in Iraq and AWB's involvment in the Oil for food program in these Guambat posts.


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