Paddy's writing on Business, Brand and Reputation

This blog contains some of my writing on Brand and Reputation, including those on Shell - the corporation that I worked for for 37 years. Some of the articles have previously been published - others are seen here for the first time. The purpose of the website is to contribute to discussions on the role of brand and reputation management in today's business world. Please also see: http://www.roadsideretail.com/search?q=Paddy Comments welcome to me at: paddy_briggs@yahoo.co.uk

Wednesday, March 19, 2003

Of course the war in Iraq is all about oil - Article published in the "Khaleej Times" March 2003


Of course the war in Iraq is all about oil

When President Bush or Prime Minister Blair moralises about the justification for their war on Iraq it is always “freeing the Iraqi people from tyranny” which features strongly in their rhetoric. A pre-emptive strike on a sovereign power is justified, in the minds of these aggressors, by the fact not only that Iraq poses an alleged threat outside its borders but also that there is a moral duty to remove a despot because of what he inflicts on his own people. The poverty of this argument is revealed by the fact that very few of the rest of the world’s largest countries support the action - and that most of the Arab world is staunchly against the war. The moral argument is hard to sustain because whilst Saddam Hussein is unquestionably an evil tyrant if this were grounds alone for military action then there are many other countries in the world where action would also be justified. In Africa, Asia, South America and Central America you do not have to look hard to find despotic regimes which bring misery to their peoples. Yet there is no military campaign underway on moral grounds by America and Britain against these tyrannies. So what is this difference? It is, of course, all about oil.
According to Sheikh Yamani, the former Saudi oil minister, reported in the British newspaper the “Daily Telegraph”, the US is examining ways of privatising the Iraqi oilfields once the conflict is over. "We know oil is very important and already the Americans have started to dispose of Iraqi oil [by offering it to others]” says Yamani." “It is said that Iraqi oil will be kept in custody for the Iraqi nation but they have even started studies of how to privatise the oil industry in Iraq. What does that tell you? The majority of people everywhere say this is a war which is about oil," he concludes.
Iraq, with more than 100bn barrels of proven reserves, is the second largest oil nation after Saudi Arabia. The exploitation of these reserves since the first Gulf war has been limited by sanctions – only production related to the UN “food for oil” programme has been allowed. But an Iraq under western domination – the certain outcome of the War – will bring American and British oil companies to the party like bees around a honey pot. The Telegraph reports that “BP and Shell have … had informal discussions with the [British] Government about Iraqi oil during "routine" meetings”. And Sir Philip Watts, the chief executive of Shell, is reported as saying that his company wants a "level playing field" when opportunities arise. In the US there is probably not even any need for routine meetings – from the President down the US administration is dominated by ex Oil men and they know the score (that the prize at stake for ExxonMobil or ChevronTexaco is those low production cost and huge Iraqi oil fields). It is not hyperbole to say that Western control of Iraqi oil would be a major blow for the unity of OPEC and would have a major impact on world oil supply, demand and price. The opposition of all OPEC members to the American/British military action is in part a recognition of this fact.
Over the past decade all the multinational oil companies have maintained low key, but focused contacts with oil men in Iraq. Although sanctions have prevented them from having any significant interest in current production they have nevertheless maintained good relations at a technical and commercial level. In Shell a full time team monitored Iraq and regular visits were made by Shell executives to Baghdad. There was nothing illegal or (in my view) immoral about these contacts - although Shell was keen that they were not publicised in any way. The internal sensitivity about Shell’s involvement in Iraq (perfectly proper though it was) was illustrated by the fact that, for a time, in all meetings (etc.) Iraq could not even be referred to in Shell by name and had to be called “East Jordan”! There is no doubt that Shell was doing all it could in those years to position itself so that it could take full advantage when sanctions were removed. And there is also little doubt that other British and European oil companies were doing the same (although it was a rather more difficult for the American companies to follow their example because of US legislation).
When Sheikh Yamani refers to “privatisation” he knows that Shell, BP and the American oil giants will be queuing up to be privatisation partners. No doubt there will be window dressing formulae found to present the post war opening up of Iraqi oil production and exports as being for the benefit of the Iraqi people. But you can be sure that (as always) to the victor will go the spoils and that the smiles on the faces of the oil men in The Hague, London and Houston will be as wide as the smiles on the faces of President Bush and his fellow oil men in the US administration.