Mission Accomplished? No, Seriously

If you believe that the invasion of Iraq was all about the oil, then it looks as though George Bush really can proclaim "mission accomplished."

The Baghdad goverment is facing a December deadline to introduce Iraq's new oil law and it's expected to be much more generous to the major oil companies than any deals they've gotten from Iraq's oil-producing neighbours.

Make no mistake about it: Iraq's oil reserves are vast and largely untapped. It is said to have 112-billion barrels of proven reserves and about 220-of probable oil reserves. Those figures don't include Iraq's vast, and unexplored western desert.

The greatest winners in the Iraqi oil fix will be the Big Four - Exxon, Chevron, BP and Shell. They stand poised to cut up the pie among themselves. Under Saddam, oil deals were negotiated with Russian, Chinese and French outfits but that was - under Saddam of course.

For years, leaders of Big Oil lobbied Washington for regime change in Iraq. They didn't want this prize to fall into the hands of the wrong nations. They also dreamed of the sort of deals that one could only hope to extract in normal circumstances. Big Oil wanted production service agreements ("PSA's") with the Iraqi government.

A PSA deal is a long term arrangement that grants an oil company both control of a field and extremely high profit margins. The oil company doesn't actually "own" the oil but that's pretty much irrelevant. Control of Iraq's oil resource is what counts. American control is going to see Big Oil get access and PSA's will see Big Oil gain actual control of the oil resources.

There has always been a view among some in Washington that gaining control of Iraq's oil wealth will allow the west to put the boots to OPEC. If Big Oil, rather than the Iraqi government, has control of the resource, these companies can operate independently of OPEC control, greatly undermining the cartel's global power.

The plotting and scheming behind this gambit is the stuff that would have made Machiavelli, Richelieu or Metternich squeal with delight.

Of course, nothing in Iraq is certain these days, certainly not the country's future. Big Oil needs the country to survive largely intact with a secular, federal government in Baghdad. If Iraq collapses into full-blown civil war, if it succumbs to pressures for partition or a secessionist movement in the Kurdish north or the Shia south, all bets may be off.

In other words, Washington stands to lose as much as any Iraqi does if the country fails. Do you think that reality has any bearing on George Bush's refusal to budge?