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Unravelling the Carbon Web is a project by PLATFORM. We work to reduce the environmental and social impacts of oil corporations, to help citizens gain a say in decisions that affect them, and to support the transition to a more sustainable energy economy.

Former British Foreign Minister helped oil giants with Iraq contracts

New documents show Malcolm Rifkind lobbied Dick Cheney for Shell and BHP Billiton to obtain major Iraq oil contract

Tuesday 4 July 2006

Dramatic new evidence has been released of high-level lobbying for Iraqi oil contracts, on behalf of oil companies BHP Billiton and Shell.

Former British Foreign Secretary Sir Malcolm Rifkind – who bid unsuccessfully last year for the leadership of the Conservative Party – promised to push US Vice President Dick Cheney for the oil companies to be granted a contract for one of Iraq’s largest oilfields, just weeks after the Iraq war.

The new information comes at a highly sensitive time, when the USA has stepped up its efforts to influence Iraqi oil policy.

Rifkind, who was director of international strategy at BHP Billiton [1], made the promise when he met with oil company executives and Australian Foreign Minister Alexander Downer in London in May 2003. The minutes of the meeting [2] have now been published by Australia’s Cole Inquiry into corruption in the Oil for Food Programme [3].

Greg Muttitt, a specialist in Iraqi oil policy with the London-based research group PLATFORM [4], commented,
“This is the clearest evidence yet that the occupation forces are making the decisions to allow their oil companies to take control of Iraq’s oil. The oil belongs to the Iraqi people, and it is outrageous that multinational companies should ask the US and UK governments for access to it – in what can only be seen as a return to colonialism.”

He added,
“It is another example of the revolving door between government and industry – which is especially strong between the Foreign Office and oil companies. For too long British foreign policy has represented the interests of major corporations over those of British citizens.” 
 
According to the newly released meeting notes, company executives “had only just started lobbying in the UK, but intended to approach Downing Street and the DTI [Department of Trade & Industry]”. In a reference to Britain’s colonial past and America’s position as the world’s only superpower, Rifkind informed them that the US had warned the UK “not to behave like the English”, but to register with the US Administration if it had particular interests in Iraqi oil – a process in which he would help them.

The Australian oil and mining company BHP Billiton had “substantially agreed” commercial terms for developing the Halfaya oilfield with the Saddam Hussein government in 1997, but had not proceeded with the project due to international sanctions. The company had later entered an agreement with oil supermajor Shell, in which the two companies would each take 40 percent of the deal.

Following the war and the end of sanctions, the companies looked to obtain a contract for the field. With up to five billion barrels of reserves, this single field in the south of Iraq contains more oil than the whole of the UK North Sea.

The meeting notes also reveal that Australian Foreign Minister Alexander Downer agreed to raise the issue with US administrator Paul Bremer and with Iraqi officials.

This revelation comes us the USA increases its efforts to shape Iraqi oil policy. The Iraqi Oil Minister has now started writing an oil law [5], to allow contracts to be signed with multinational oil companies for the first time in more than 30 years – and bucking the trend of the Middle East region, where most oil production is in the public sector [6].

On President Bush’s recent visit to Baghdad, oil was one of the main issues he discussed. He has now pledged to send his Energy Secretary to participate in writing the oil law. The US Government has also hired advisers to work on the law [7].


Notes for editors:

1: Rifkind was Foreign Secretary from 1995 to 1997. He joined BHP as director of international strategy in 1997, following the loss of his parliamentary seat in the general election. He has been described as BHP’s “door-opener” to the Middle East. He is now an adviser to the company.
Rifkind is also chairman of Armor Group, one of the largest private security firms operating in Iraq.

2: See the document here

3: The Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme, overseen by the Honourable Terence Cole QC, was established in November 2005 to examine whether Australian companies mentioned in the report of Paul Volcker inquiry into corruption in the Oil for Food Programme. In February 2006, the terms of reference were extended to included BHP Billiton, which provided $5 million of wheat to Saddam Hussein’s government in 1996, in unclear circumstances. The Cole Inquiry is set to be completed in September 2006. The Inquiry’s official website is here

4: PLATFORM works on issues of social and environmental justice, specialising in the impacts of the oil industry. In November 2005, PLATFORM published Crude Designs – The rip-off of Iraq’s oil wealth, revealing the US/UK oil agenda and its consequences for Iraq.

5: New Oil Minister Husayn Shahristani announced days after his appointment in late May that he would draft an oil law within two months, to enable Iraq to sign contracts with “the largest companies”. He stated that the law would be passed through the Iraqi parliament by the end of the 2006 – the deadline set by the International Monetary Fund.

6: Iraq’s oil was 99.5% nationalised in 1961, and the final portion brought into the public sector in 1972-75. Oil remains fully nationalised in Iraq’s neighbours, Saudi Arabia, Kuwait and Iran. These four countries together contain more than 50% of the world’s total oil reserves.

7: The advisers are from Bearing Point, a consultancy specialising in privatisation, and were hired by the US government’s aid agency USAID in spring 2006.