(IRAQ) ALL ABOUT OIL

Forwarded by RAdm Stephen Barchet USN ret
By Kenneth R. Timmerman, March 16, 2004
Timmerman is a senior writer for Insight magazine. His book, The French Betrayal of America, is just out.

Many Americans are convinced, even today, that the war in Iraq was all about oil. And they're right — but oil was the key for French President Jacques Chirac, not for the United States.

In documents I obtained during an investigation of the French relationship to Saddam Hussein, the French interest in maintaining Saddam Hussein in power was spelled out in excruciating detail. The price tag: close to $100 billion. That was what French oil companies stood to profit in the first seven years of their exclusive oil arrangements — had Saddam remained in power.

The French claimed their opposition to the US-led war to oust Saddam Hussein was all about policy. The editor of the Paris daily Le Monde, Jean-Marie Colombani, just resuscitated those arguments in an editorial that singled out George W. Bush as “a threat to the very foundation of the historical alliance between the US and Europe,” and called fervently for the election of John F. Kerry. (I guess that F now stands for France.) But Colombani, whose paper's coverage of the war in Iraq was noteworthy for its wanton disregard for the truth, had not a word to say about his country's war for oil. Indeed, the secret deals the French state-owned oil companies negotiated in the 1990s with Saddam Hussein went widely unreported in France.

Almost as soon as the guns went silent after the first Gulf war in 1991, French oil giants Total SA and Elf Aquitaine — who have now merged and expanded to become TotalFinaEl — sought a competitive advantage over their rivals in Iraq by negotiating exclusive production-sharing contracts with Saddam's regime that were intended to give them a stranglehold on Iraq's future oil production for decades to come.

The first of two massive deals was announced in June 1994 by then-Iraqi Oil Minister Safa al-Habobi — a well-known figure whose name had surfaced in numerous procurement schemes in the 1980s in association with the Ministry of Industry and Military Industrialization, which supervised Saddam's chemical, biological, missile and nuclear-weapons programs. Speaking in Vienna, al-Habobi confirmed that his government was awarding Total SA rights to the future production of the Nahr Umar oil field in southern Iraq, and that Elf was well-placed to be awarded similar terms in the Majnoon oil fields on the border with Iran.

Those two deals, which I detail in The French Betrayal of America, would have been worth an estimated $100 billion over a seven-year period — but were conditioned on the lifting of UN sanctions on Iraq. Simply put, analyst Gerald Hillman told me, the French were saying: “We will help you get the sanctions lifted, and when we do that, you give us this.” The Total contract, a copy of which I obtained, was “very one-sided,” says Hillman. (Hillman, a political economist and a managing partner at Trireme Investments in New York, did a detailed analysis of the contract.)

An ordinary production agreement typically grants the foreign partner a maximum of 50 percent of the gross proceeds of the oil produced at the field they develop. But this deal gave Total 75 percent of the total production. “This is highly unusual,” he said. Indeed, it was extortion. But Saddam willingly agreed: He saw the Total deal, and a similar one with Elf, as the price he had to pay to secure French political support at the United Nations.

Much has been written in recent weeks about the corruption of the UN Oil-for-Food program. Documents uncovered in Iraq's oil ministry and published by the Baghdad daily al Mada list several cronies of French President Chirac among those who had received special oil allocations as a political payoff from Saddam. But the amounts attributed to these individuals — in the tens of millions of barrels, on which they stood to earn between 25 to 40 cents per barrel — pale in comparison to the $100 billion payoff orchestrated by Chirac and Saddam.

No, oil wasn't the only reason France opposed the United States at the United Nations in the lead-up to the war. The megalomania of Foreign Minister Dominique de Villepin (who lied to Secretary of State Colin Powell repeatedly and later boasted about it to visiting US congressional delegations) certainly entered into the mix. So did French pride, wounded at the realization that France is no longer the great power it once was. But the French did not merely disagree with the United States over Iraq, as did a certain number of our allies: They actively sought to rally world leaders and public opinion to treat the United States — not Saddam Hussein — as the enemy.

The enormous difference between those two positions — legitimate dissent and active subversion of America's right to self-defense — is why America is right to treat France as a former ally. Under Chirac's stewardship, France has shown the world that it cared more about propping up a murderous dictator than it valued its 225-year alliance with America.