Scraping the Barrel… 27 July 2012

In today’s news roundup, Greg Muttitt reveals untold stories of the occupation of Iraq and explores the reasons behind the US invasion (yes, oil figures in the story but not in the way most like to think); international companies plan Uganda’s oil export future while the government looks the other way; and a top US Senator confirms that, indeed, he and many of his besuited colleagues are afraid of China.

In this interview with Jadaliyya ezine, Greg Muttitt, author of the superb Fuel on The Fire: Oil and Politics in Occupied Iraq, sheds light on Iraq’s controversial and yet-to-pass oil law, along with other under-reported nuggets on the US occupation of Iraq. It’s pretty common knowledge that oil was at the center of the 2003 invasion but, as Muttitt explains, it wasn’t as simple as the US trying to secure Iraq’s oil riches for ExxonMobil and other oil industry chums. A central facet of the occupation strategy was getting an oil law passed that would break open to foreign investment an industry that had been the nationalized prideful heart of Iraq since the 1970s. The Bush administration was coy on its interest in Iraq’s first post-Saddam oil law, but its failure to get a law passed during the occupation – thanks in large part to the effort of Iraqi civil society in raising awareness and widespread opposition to the law – is one of the great untold stories of the occupation. The interview offers a unique take on the shifting power dynamics in Iraqi politics and what the oil industry means to Iraq’s engineers, technocrats and ordinary citizens – from an author who’s seen it all unfold on the ground.

Uganda, one of Africa’s newer hydrocarbon provinces, will become an oil exporter if the companies have their way. Three major international companies with operations in Uganda – Ireland’s Tullow, China’s CNOOC and France’s Total – are studying potential routes and costs for an export pipeline, and while the government has not come out in support of a proposed pipeline, it has not rejected the idea, either. Exporting oil – of which Uganda is expected to produce a peak of 200,000 barrels per day once production starts in three years at earliest – would fill government coffers, to be sure. But as always there are persnickety little details that threaten to get in the way: the cost of a pipeline to transport Uganda’s waxy oil, for example, and land ownership and eviction questions along the proposed pipeline route. The government’s official position is that it doesn’t want to alienate its electorate wants to fulfill regional demand in East Africa before exporting oil. The companies, unsurprisingly, are bullish on the idea of Uganda selling its oil as fast as possible while demand is still high. How will this one turn out? Methinks, for one, tanks will soon be filling with Ugandan oil at a petrol station near you. 

Breaking news: US politicians fear the Chinese bogeyman. Ok, not so breaking, maybe… but this story caught my eye because, beyond all the fear-mongering rhetoric that has come out of Washington the past several years, a top senate democrat plans to tell the Treasury Secretary that the powerful Committee on Foreign Investment in the United States (CFIUS), which reviews foreign takeovers of US assets, should not approve the bid of China’s state oil company CNOOC for Canadian oil company Nexen until China makes “tangible, enforceable commitments” on market access for U.S. companies. Basically, the senator, Charles Schumer, wants US companies given access to restrictive Chinese markets before a Chinese company gains a significant foothold in North America’s oil assets. Legitimate concerns, as US enterprise has long been pining for unrestricted access in China, and Schumer’s last-ditch efforts to strike down the CNOOC deal aren’t coming out of nowhere. But the move also smacks of desperation.

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