Oilmen don't want another Suez

Oilmen don't want another Suez
Anthony Sampson

Observer special: Iraq

Sunday December 22, 2002
The Observer

While Washington hawks depict a war against Iraq as achieving security
Of oil supplies, Western oil companies are worried about the
short-term danger and the supposed long-term benefits of intervention.
Left-wing critics in Britain depict the proposed invasion as an oil war.
Former Cabinet Minister Mo Mowlam has called it a 'war to secure oil
supplies' as a cover for a war on terrorism. And the fact that President
George Bush and Vice-President Dick Cheney have both been enriched by
Oil companies raises suspicions about their motives for war.

But oil companies have had little influence on US policy-making. Most
big American companies, including oil companies, do not see a war as
good for business, as falling share prices indicate; while the obvious
beneficiaries of war are arms companies.

Western oil companies have differing attitudes. The French want to
maintain their special relationship with Iraq, while seeking links
with Iraqi opposition leaders who may form a post-war government.

The Russians are performing a more difficult balancing act. Worried that
their previous friendship with Saddam might exclude them from a post-war
share-out, they have sought assurances from Washington in return for
their diplomatic support for a war. But Saddam has counter-attacked by
cancelling the Russian contract for developing new oilfields.

The British believe they are specially entitled to share in the
development of Iraqi oil supplies. BP (then known as Anglo-Persian) was
involved in the discovery of oil after the British and the French
invented Iraq as a separate state, carved out of the Ottoman Empire in
1920.

But BP is worried about being displaced by US companies. As Lord Browne,
its chief executive, said in October: 'We would like to make sure, if
Iraq changes its regime, that there should be a level playing-field for
the selection of oil companies to go in there.'

The oil companies are much less confident that this escalation will
protect supplies. Shell and Exxon-Mobil have made huge investments in
natural gas in Saudi Arabia, which could be at risk in a confrontation
with the Saudi government. All oil companies in the Middle East would
face a more dangerous political climate, caught between the
American-Israeli intervention and nationalists fearing reversion to a
neo-colonial system.

Oil companies dread having supplies interrupted by burning oilfields,
saboteurs and chaotic conditions. And any attempt to redraw the
frontiers could increase the dangers in both Iran and Iraq, as rivals
seek to regain territory.

When Anthony Eden invaded Egypt in 1956, with France and Israel, he
claimed to be defending British interests - without consulting the
oil companies which opposed the invasion. The Suez war proved a
great setback for BP and Shell, which faced angry nationalist
reactions throughout the Middle East, while the Americans made the
most of their advantage.

Many oil executives now fear a war against Iraq could have more
dangerous repercussions; if it goes wrong, they will be among the first to
blame the governments that launched it.

http://www.observer.co.uk/iraq/story/0,12239,864387,00.html