Thursday 23 June 2005

As the costs of the Iraq occupation spiral, British and American oil companies meet in secret next week to carve up the country's oil reserves for themselves. Tom Burgis reports

Iraq war has so far cost America and Britain £105billion. But the financial clawback is gathering pace as British and American oil giants work out how to get their hands on the estimated £3trillion worth of oil.

Executives from BP, Shell, Exxon Mobil and Halliburton, Dick Cheney's old firm, are expected to congregate at the Paddington Hilton for a two-day chinwag with top-level officials from Iraq's oil ministry. The gathering, sponsored by the British Government, is being described as the "premier event" for those with designs on Iraqi oil, and will go ahead despite opposition from Iraqi oil workers, who fear their livelihoods are being flogged to foreigners. The Met will be on hand to secure the venue ahead of the conference.

"This is a networking opportunity for UK businesses involved in Iraqi oil," explained Dr Hussain Rabia, managing director of the consultancy Entrac Petroleum Ltd. "We have the moral support of the UK government. They're bringing the guys over from Iraq, offering them visas. We expect all the big oil companies to be there," he said.

Delegate numbers are described as "confidential". Shell spokesman Simon Buerk would not confirm that a representative of the company would be attending, but said he "wouldn't be at all surprised if they were".

"We aspire to establish a long-term presence in Iraq," he said. "We have been helping the [Iraqi] Ministry of Oil and engineers with training."

Those who have purchased their £1,200 tickets can expect access to executives from Iraq's oil ministry, including Salem Razoky, the director general of exploration.

But Iraqi oil workers are furious about the conference. "The second phase of the war will be started by this conference carving up the industry," said an outraged Hasan Juma'a, head of the Iraqi General Union of Oil Employees. "It is about giving shares of Iraq to the countries who invaded it - they get a piece of the action as a reward. The British government will back this action in order to pay its debt in Iraq."

Hasan, who represents 23,000 skilled oil workers, fears that deals struck at the conference will see profits from Iraq's massive oil reserves - the second richest in the world - lining the pockets of multinational corporations at the expense of the Iraqi people.

Previous form suggests his concerns are well founded. Under the initial wage table drawn up by Paul Bremer's provisional Baghdad government in September 2003, oil workers were to receive a minimum monthly pay packet of £25. After a threatened union strike, it was raised to £38. And, Hasan insists, "Iraqi oil workers are good enough to rebuild without any need of help. "

Greg Muttitt, a researcher with Platform, an independent environmental think thank, agrees. "The decisions on how to carve up Iraq are being made behind closed doors in Washington, London and Baghdad.

"This conference is a key part of the plan to help multinational companies get stuck in once those arrangements are in place. It's a corporate feeding frenzy - they're not writing the recipes, they're tucking in their napkins."

Yahia Said, an Iraqi research fellow in global governance at the London School of Economics, commented:

"Iraq's oil is very cheap to extract. In the lack of transparency and with Iraq under occupation, people suspect oil companies are up to foul play. But those companies wouldn't yet dare sign a contract under the present government because it lacks legitimacy. But the oil companies are eyeing each other - this conference is like a dating game."

As such, a spokesperson for British governmental body UK Trade & Investment insisted that "no contracts will be awarded" at the conference. "Although we believe that British and other companies can play a key role, it will be up to the Iraqis, through their elected representatives to decide whether there is a role for them or not."

But the British government's position is in line with that of conference organisers, who point to Iraq's current oil output, which is stalled at 1.8million barrels per day, less than a third of what it could be.

"We all want to reconstruct Iraq," argued Rabia. "You can have all the demos you want, but 70 per cent of people in my country don't have sanitation. It's 45 degrees there now. I've listened to a lot of people and there's no way you can reconstruct without people from the UK and the US, and their money."