The Militant (logo)  
   Vol. 67/No. 10           March 31, 2003  
 
 
Imperialist powers
compete for bigger
share of oil riches
 
BY PAUL PEDERSON  
On the web page of the U.S. Central Command there is a section titled simply, "oil."

The command, known as Centcom, oversees U.S. military operations in the Middle East, northeast Africa, and southwest Asia, and is in charge of the escalating U.S. and British-led war against Iraq.

"Unrestricted access by the industrial nations of the world to the Central Region’s vast oil reserves remains an imperative," the web page reads. "Over two-thirds of the world’s proven oil reserves," it observes, are in "the narrow crescent of land extending west from Iran and south to the United Arab Emirates."

Those resources are a key target of the impending U.S.-led invasion of Iraq, and of the growing interimperialist conflicts between Washington and Paris and their various allies and competitors.

Oil holdings in Africa, Latin America, and elsewhere--along with other natural riches--are also prizes in this intensifying competition.  
 
Mideast oil, imperialist rivalries
For the last century the imperialist powers have tussled over the strategic advantages and mineral riches of the Arab-Persian Gulf. The struggle sharpened as the extent of the oil reserves became known, and as Washington overtook London as the predominant imperialist power.

Until World War II British Petroleum (BP), backed by the armed forces of the British Empire, gained the lion’s share of the oil concessions. In the first two decades after the war, however, U.S. monopolies began to wrest control of the region’s oil from their British rivals. One decisive point in the displacement of British power was the CIA-engineered coup that toppled the nationalist Mossadegh government in Iran in 1953 and restored to power the brutal regime of the Shah.

As the colonial system weakened under the shock of the postwar wave of independence struggles, governments of the oil-producing countries began demanding a greater share of their national wealth.

This was the context in which the Organization of Petroleum Exporting Countries (OPEC) was founded in 1960. OPEC is a bloc formed by oil-rich semicolonial nations to assert greater control over their own resources. Its members have more than two-thirds of the world’s oil reserves, enabling them to influence the price of oil on the world market through production quotas.

At the same time the giant U.S. and British oil concerns--known as the Seven Sisters until mergers reduced their number to six--and the governments that back them play a dominant role in all facets of the oil industry worldwide.

In 1973 the OPEC nations declared an oil embargo against the United States because of Washington’s support for Israel in its war against its Arab neighbors, and increased the price of oil to Europe by 70 percent. By the mid-1970s many of these nations, including Iraq, had nationalized their oil fields in a serious blow to the imperialists.

Licking his lips at the prospect of a post-Saddam Iraq, New York Times columnist William Safire wrote last October that "rising production from a non-OPEC Iraq, matched by Saudi price cuts from princes desperate to hold market share, could well reduce world oil prices by a third."

French companies and government officials stepped up their oil and arms ties with Iraq following the nationalization of the petroleum industry. After the 1990–91 U.S-led Gulf War, French oil companies continued to sign oil deals. Such contracts currently guarantee them access to about 25 percent of Iraq’s oil reserves should United Nations sanctions be lifted. All such deals are opened to question by the threatened U.S.-initiated "regime change."

In 1979 U.S. imperialism suffered its heaviest blow to date in the region, when the Iranian people toppled the Shah from his "peacock throne." The French government and its major oil company, TotalElfFina, have signed lucrative oil and natural gas deals with the post-Shah governments in Tehran.

TotalElfFina’s Middle East’s director, Christophe de Margerie, said in 1997 that "we will work with all countries in the region, including Iran and Iraq as soon as that becomes possible."

With no major oil reserves on their own soil the biggest powers of continental Europe are heavily reliant on Mideast oil. Even more dependent is big business in Japan, which imports over 75 percent of its oil from the region. Any increase in the presence of U.S. and British oil companies in the region would be a blow to the German and French imperialists, in particular.

In face of the opposition of Paris and other governments, including Moscow, to Washington’s plans, at least one U.S. commentator has threatened that they will be cut out of the postwar divvy-up altogether.

"France and Russia have oil companies and interests in Iraq," said James Woolsey, a former CIA director. "If they throw in their lot with Saddam, it will be difficult to the point of impossible to persuade the new Iraqi government to work with them."  
 
Western Africa a source of riches
Washington has less of a foothold in western Africa, an oil-rich region in which France still plays a dominant role. Newly discovered oil deposits in the Gulf of Guinea and elsewhere, however, have begun to draw Washington into more direct competition.

"West Africa is expected to be one of the fastest growing sources of oil and gas for the American market," U.S. vice president and former oil company executive Richard Cheney said in 2001.

Some 15 percent of U.S. oil imports come from the area--mainly Nigeria, as well as Angola in southern Africa. Equatorial Guinea, Gabon, Chad, and the islands and nations along the Gulf of Guinea have more recently discovered oil deposits.

President Fradique de Menezes of the Gulf of Guinea island-nation of Sao Tomé and Principe recently announced that he reached an agreement with Washington for the construction of a U.S. naval base there.

As Paris sent several thousand troops to the Ivory Coast in September, seeking to impose a settlement on the government and rebel forces, 200 U.S. Special Forces also entered the country, under the pretext of saving U.S. nationals from the bloodshed. They have since pulled back to neighboring Ghana. Other U.S. forces are stationed in Djibouti, on Africa’s northeastern coast, where French troops are also stationed.

U.S., British, Canadian, and French companies all own stakes in Ivory Coast’s rich offshore oil deposits.  
 
Explosive continent of Latin America
The U.S. companies face less competition from their imperialist rivals in Latin America, which accounts for about a third of U.S. oil imports. The Andean region, particularly Venezuela, Colombia, and Ecuador, has extensive oil deposits. Venezuela alone accounted for 17 percent of U.S. imports in 2000.

The failure of the bosses’ strike that crippled oil production in Venezuela over the last several months, and of an attempted antigovernment coup last April, dealt blows to Washington’s ongoing efforts to undermine or overthrow the government of Hugo Chávez and replace it with one more subservient to U.S. interests. Goldman Sachs described the strike as "one of the largest shocks in oil market history." Venezuelan oil production has still not recovered to anything like pre-strike levels.

Over the past decade Washington has made some gains in its efforts to press the countries in the region to privatize their state oil companies. Deals signed with Ecuador, Colombia, and Venezuela in the mid-1990s opened up parts of the nationalized oil wealth to foreign investment.

Along with deeper economic penetration, the U.S. military presence in South America has grown over the last few years. The Bush administration recently announced plans to increase the number of U.S. Special Forces in Colombia from 250 to 400, and U.S. troops are currently training the Colombian army to guard the Caño Limón oil pipeline owned by the Los Angeles-based Occidental Petroleum Company.  
 
Oil reserves in former Soviet countries
U.S. and European oil companies are also scrambling to increase their share of the growing oil industry in the former Soviet republics of the Caspian Sea region, "considered one of the largest sources of petroleum outside the Persian Gulf and Russia," according to a U.S. Department of Energy report. "The region’s largest producers are Azerbaijan and Kazakhstan. The key to foreign investment in these two Caspian nations is obtaining secure export routes." Currently the only pipeline routes for exporting oil from the region are owned by Russian state oil companies.

In a March 4 talk titled "Reliable Supplies of Energy for a Growing World Economy," U.S. undersecretary of state Alan Larson called on Moscow to "embrace competition and private investment in oil and gas transportation systems" and to "have a positive attitude toward the development of multiple pipeline projects for transportation of Caspian energy to Western markets.

"We welcome the groundbreaking on the Baku/Tbilsi/Ceyhan oil pipeline that will allow energy from Azerbaijan and Kazakhstan to reach world markets at competitive prices," said Larson. Nearly 1,100 miles long, this pipeline, commissioned by BP and in the beginning stages of construction, will run from the Caspian port city of Baku in Azerbaijan, through the Black Sea port of Tbilsi in Georgia, to Ceyhan in Turkey on the Mediterranean.

Washington used its war on Afghanistan to increase its military foothold in the region, and advance the prospects of U.S. companies for involvement in the oil industry. U.S. forces now occupy bases in Uzbekistan, Georgia, and elsewhere.

The imperialist governments and corporations, however, continue to come up against the fact that the countries in this region are workers states. Investments in the area often involve agreements to support social infrastructure, pensions, and other gains that workers have won through the expropriation of the capitalist class.

In regard to Kazakhstan, the U.S. Department of Energy report lamented that state-controlled Kazak companies’ "large debts, nonproductive assets, and lack of transparency made investors cautious." It also complained about "the many preconditions associated with the awarding of shares, particularly the required pledges for investment, social guarantees, payment of old debts, and environmental liability."  
 
 
Front page (for this issue) | Home | Text-version home