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Context of 'Fall 2002-January 2003: US State Departments and Former Oil Executives Plan Iraq’s Post-Invasion Oil Industry'

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“Within weeks” of taking office, the Bush administration begins planning for a post-Saddam Iraqi government. The State Department convenes a series of secret discussions attended by prominent Iraqi expatriates, many with ties to US industries, to plan for a post-Saddam Iraq. The meetings are held in the home of Falah Aljibury, an adviser to OPEC, Goldman Sachs, and Amerada Hess’s oil trading arm. He also served as Ronald Reagan’s backchannel to Saddam Hussein during the 1980s. According to Aljibury, the discussion group, led by Pamela Quanrud, an NSC economics expert, quickly evolves into an “oil group.” The plan they develop is said to represent the views of the oil industry and the State Department. According to the plan, Saddam Hussein would be replaced by some former Baathist general, while the rest of the government would continue to function as before. One of the candidates that is considered to head post-Saddam Iraq is Gen. Nizar Khazrahi (see Between February 2001 and February 2003), who is under house arrest in Denmark awaiting trial for war crimes. “The petroleum industry, the chemical industry, the banking industry—they’d hoped that Iraq would go for a revolution like in the past and government was shut down for two or three days,” Aljibury will later tell reporter Greg Palast. “You have martial law… and say Iraq is being liberated and everybody stay where they are… Everything as is.” [BBC Newsnight, 3/17/2005; Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 74-76]

Entity Tags: Falah Aljibury, Pamela Quanrud, Bush administration (43), Nizar Khazrahi

Timeline Tags: Events Leading to Iraq Invasion

The Bush administration picks Philip Carroll, a former CEO of Royal Dutch/Shell’s US division, to advise post-Saddam Iraq’s oil ministry. [Harper's, 4/2005, pp. 74-76] He is formally appointed in January 2003 along with Gary Vogler of ExxonMobil, three employees of the US Department of Energy, and an employee of the Australian government. In the months before the invasion, they are sent to Kuwait where they “begin planning for the restructuring of the ministry of oil to improve its efficiency and effectiveness [and] begin thinking through Iraq’s strategy options for significantly increasing its production capacity,” Carroll later explains. [Muttitt, 2005]

Entity Tags: US Department of State, Gary Vogler, Australia, Philip J. Carroll

Timeline Tags: Events Leading to Iraq Invasion

In a paper titled, “The Road to Economic Prosperity for a Post-Saddam Iraq,” which is a part of the study, “A Future of a Post-Saddam Iraq: A Blueprint for American Involvement,” authors Ariel Cohen and Gerald P. O’Driscoll argue for the implementation of neoliberal reforms including the privatization of Iraq’s major industries. The document says that poverty in Iraq is a result of Saddam Hussein’s mismanagement, namely Saddam’s decision to nationalize certain industries; Iraq’s war with Iran; the invasion of Kuwait; and Saddam’s refusal to comply with the requirements for the suspension of UN sanctions. The paper’s proposal for jumpstarting Iraq’s economy focuses on privatization of Iraq’s industries and several other neoliberal reforms. To complement this, the authors recommend using the “media and the educational system to explain the benefits of privatization and the changes to come in order to ensure broad public support.” The costs of reconstruction, they suggest, could be paid for with funds generated from the sale of Iraq’s oil. “Iraq’s vast oil reserves are more than ample to provide the funds needed to rebuild and boost economic growth,” the report says. [Observer, 11/3/2002; Cohen and O'Driscoll, 3/5/2003] But in order to generate this amount, Cohen and Driscoll write, the post-Saddam government would probably have to reconsider its membership in the Organization of Petroleum Exporting Countries (OPEC). “Following the demise of Saddam Hussein, it is unlikely that the Saudi kingdom would transfer a fraction of its production quota under the [OPEC] regime to Iraq to compensate for those lost profits and facilitate its rebuilding,” the authors note. “Iraq will need to ensure cash flow for reconstruction regardless of OPEC supply limitations. Combined with the potential privatization of the oil industry, such measures could provide incentive for Iraq to leave the OPEC cartel down the road, which would have long term, positive implications for global oil supply.… An Iraq outside of OPEC would find available from its oil trade an ample cash flow for the country’s rehabilitation.” [Cohen and O'Driscoll, 3/5/2003] Cohen will later admit in an interview after the invasion of Iraq that his interest in Iraq withdrawing from OPEC was to destabilize Saudi Arabia (see Early 2005).

Entity Tags: Gerald P. O’Driscoll, Saddam Hussein, Ariel Cohen

Timeline Tags: Events Leading to Iraq Invasion

Elliott Abrams drafts a proposal, in which he argues that the United States should take de facto control of Iraqi oil fields. The proposal is not well-received by moderates in the Bush administration who question the legality of the proposal, and who argue “that only a puppet Iraqi government would acquiesce to US supervision of the oil fields and that one so slavish to US interests risks becoming untenable with Iraqis,” reports Insight Magazine. Such a move would also lend credence to suspicions that the invasion is motivated by oil interests, the critics add. [Insight, 12/28/2002] A similar recommendation was made in a paper published by the Heritage Foundation in late September (see September 25, 2002).

Entity Tags: Heritage Foundation, Elliott Abrams

Timeline Tags: Events Leading to Iraq Invasion

The Oil and Energy Working Group, one of 17 such groups working under the US State Department’s “Future of Iraq” project (see April 2002-March 2003), meets to discuss plans for the oil industry in a post-Saddam Hussein Iraq. The only known member of the 15-member group is Ibrahim Bahr al-Ulum, who will become Iraq’s oil minister after the invasion. Other people likely involved include Ahmed Chalabi of the Iraqi National Congress, Sharif Ali Bin al Hussein of the Iraqi National Congress; recently defected personnel from Iraq’s Ministry of Petroleum; the former Iraqi head of military intelligence; Sheikh Yamani, the former Oil Minister of Saudi Arabia; and unnamed representatives from the US Energy Department. The responsibilities of this working group include: (1) developing plans for restoring the petroleum sector in order to increase oil exports to partially pay for a possible US military occupation government. (2) reconsidering Iraq’s continued membership in the Organization of Petroleum Exporting Countries (OPEC) and “whether it should be allowed to produce as much as possible or be limited by an OPEC quota.” (3) “consider[ing] whether to honor contracts made between the Hussein government and foreign oil companies, including the US $3.5 billion project to be carried out by Russian interests to redevelop Iraq’s oilfields.”] [Oil and Gas International, 10/30/2002; Observer, 11/3/2002; US Department of State, 12/19/2002; Financial Times, 4/7/2003; Financial Times, 9/5/2003; Muttitt, 2005] By April 2003, the working group will have met a total of four times. One of the policies they agree on is that Iraq “should be opened to international oil companies as quickly as possible after the war” and that development of Iraq’s oil fields should be done through the use of Production Sharing Agreements (PSAs). Under a typical PSA, oil ownership remains with the state, while exploration and production are contracted to the private companies under highly favorable terms. [Muttitt, 2005; Los Angeles Times, 12/8/2006]

Entity Tags: Ahmed Chalabi, Sheikh Yamani

Timeline Tags: Events Leading to Iraq Invasion

The Bush administration completes a 100-page blueprint for post-Saddam Iraq. The document replaces the State Department- and Big Oil- sanctioned plan (see February 2001 and After) with one favored by neoconservatives calling for the privatization of Iraq’s oil reserves and supporting industries as a means to undermine the OPEC cartel and destabilize Saudi Arabia (see Early 2005). It new plan bears strong resemblance to the recommendations that were put forth in a September 2002 Heritage Foundation paper by Ariel Cohen and Gerald P. O’Driscoll (see September 25, 2002). It is also heavily influenced by corporate lobbyists, including Grover Norquist, the outspoken advocate for a flat-tax system. The plan advocates changing Iraq’s tax and copyright law, as well as implementing a variety of other neoliberal reforms. [Cohen and O'Driscoll, 3/5/2003; BBC Newsnight, 3/17/2005; Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 74-76]

Entity Tags: Bush administration (43), Gerald P. O’Driscoll

Timeline Tags: Events Leading to Iraq Invasion, Neoconservative Influence

State Department officials Ariel Cohen and Gerald P. O’Driscoll update their September 2002 paper titled, “The Road to Economic Prosperity for a Post-Saddam Iraq,” (see September 25, 2002) expanding the section which addresses plans for post-Saddam Iraq’s oil industry. The update is apparently a reaction to the State Department’s opposition to the neoconservatives’ proposal to sell off Iraq’s oil fields. They say that despite Secretary of State Colin Powell’s remarks that the “oil of Iraq belongs to the Iraqi people… [and] will not be exploited for the United States’ own purpose…” the US should still provide “guidance to the future government of Iraq on establishing sound economic and trade policies to stimulate growth and recovery.” [Cohen and O'Driscoll, 3/5/2003]

Entity Tags: US Department of State, Colin Powell, Gerald P. O’Driscoll, Ariel Cohen

Timeline Tags: Events Leading to Iraq Invasion

Philip Carroll, the chief adviser to the new Iraqi government’s oil ministry, tells the Washington Post that Iraq might end its membership in OPEC. “[Iraqis] have from time to time, because of compelling national interest, elected to opt out of the quota system and pursue their own path…. [The new Iraqi government] may elect to do that same thing.” But Carroll later tells investigative reporter Greg Palast that he personally would not have supported privatization. “Nobody in their right mind would have thought of doing that,” he later explains. [Washington Post, 5/17/2003, pp. E01]

Entity Tags: Philip J. Carroll

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

Three key intelligence advisers are forced to resign, or fired, by neoconservative Elliott Abrams, the National Security Council (NSC)‘s presidential adviser on the Middle East (see December 2002 and December 2002). Flynt Leverett was the senior director for Middle East affairs on the NSC; Hillary Mann was a foreign service officer on detail to the NSC as its director for Iran and Persian Gulf affairs; and Ben Miller was a CIA staffer and an NSC expert on Iran. All three are forced out because they disagree with Abrams’s views towards Israel. Miller also questioned Iraqi exile Ahmed Chalabi’s fitness to become the new leader of Iraq. Leverett will later say: “There was a decision made… basically to renege on the commitments we had made to various European and Arab partners of the United States [in favor of Israel]. I personally disagreed with that decision.” According to Yossef Bodansky, the director of the Congressional Task Force on Terror and Unconventional Warfare, Abrams “led Miller to an open window and told him to jump.” Bodansky will also confirm that Mann and Leverett are ordered to leave the NSC by Abrams. [Unger, 2007, pp. 291]

Entity Tags: Elliott Abrams, Ben Miller, Yossef Bodansky, National Security Council, Hillary Mann, Flynt Leverett

Timeline Tags: US International Relations

Philip Carroll, the chief adviser to the new Iraqi government’s oil ministry, and Gary Vogler, another adviser, resign and are replaced by Rob McKee, a former vice president of ConocoPhillips, and Terry Adams of BP Oil. [Muttitt, 2005; Harper's, 4/2005, pp. 75]

Entity Tags: Gary Vogler, Philip J. Carroll, Rob McKee, Terry Adams

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

Rob McKee, chief advisor to Iraq’s oil ministry, commissions a new plan for Iraq’s oil industry, which is intended to replace the Pentagon’s original plan for privatization. The plan is written by State Department Contractor BearingPoint, but significant input comes from oil industry consultants and executives. BearingPoint’s work is overseen by Amy Jaffe of the James A. Baker III Institute for Public Policy of Rice University. [Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75]

Entity Tags: Rob McKee, Amy Myers Jaffe, BearingPoint

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

Mike Stinson of ConocoPhillips and Bob Morgan of BP replace Rob McKee and Terry Adams as advisers to Iraq’s oil ministry. The British government pays them £147,700 for their work. [Muttitt, 2005]

Entity Tags: Bob Morgan, Terry Adams, Rob McKee, Mike Stinson

Timeline Tags: Iraq under US Occupation

Ariel Cohen, who co-authored a September 2002 paper (see September 25, 2002) recommending the privatization of Iraq’s oil industry, explains to reporter Greg Palast how his privatization plan would have ended OPEC’s control over oil prices. He says that if Iraq’s fields had been sold off, competing companies would have quickly increased the production of their individual patches, resulting in over production which would have flooded world oil markets, thrown OPEC into panic, and destabilized the Saudi monarchy. [BBC Newsnight, 3/17/2005; Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75]

Entity Tags: Organization of Petroleum Exporting Countries, Ariel Cohen, Greg Palast

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

US State Department spokesman Philip J. Crowley calls the treatment of alleged whistleblower Bradley Manning “ridiculous and counterproductive and stupid.” The remarks are made at a talk at the Massachusetts Institute of Technology about how new media are impacting foreign policy, during a question-and-answer session. Crowley is asked about what he thinks about WikiLeaks and the US “torturing a prisoner in a military brig.” After criticising the conditions of Manning’s detention, Crowley adds, “None the less Bradley Manning is in the right place,” and goes on to say that in Washington’s view, “there is sometimes a need for secrets… for diplomatic progress to be made.” When the remarks become news, Crowley will issue a clarification: “What I said was my personal opinion. It does not reflect an official [US government] policy position. I defer to the Department of Defense regarding the treatment of Bradley Manning.” [BBC, 3/12/2011]

Entity Tags: Bradley Manning, US Department of State, Philip J. Crowley

Timeline Tags: Torture of US Captives, Iraq under US Occupation, Misc Entries, Domestic Propaganda

State Department spokesman Philip J. Crowley is forced to resign from his position under pressure from the White House following his criticism of the treatment of whistleblower Bradley Manning (see March 12, 2011). According to CNN, White House officials are “furious” about Crowley’s statement that the treatment of Manning is “ridiculous and counterproductive and stupid.” In his resignation statement, Crowley attributes his resignation to the media coverage of his remarks: “Given the impact of my remarks, for which I take full responsibility, I have submitted my resignation.” However, CNN adds, “Crowley has told friends that he is deeply concerned that mistreatment of Manning could undermine the legitimate prosecution of the young private.” In addition, Crowley thinks he has the administration’s best interests at heart because “he thinks any mistreatment of Manning could be damaging around the world to President Obama, who has tried to end the perception that the United States tortures prisoners.” [CNN, 3/13/2011]

Entity Tags: Philip J. Crowley, US Department of State, Bradley Manning, White House

Timeline Tags: Misc Entries, Domestic Propaganda

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