A popular conspiracy theory about the US invasion of Iraq was that America wanted to seize control of its oilfields to divide them up with western allies and friends in the boardrooms of "Big Oil". The truth is, that was never on the cards. A return to the "good old days" for western colonial powers in oil-rich parts of the Middle East would never have been tolerated by any legitimate post-war Iraqi government or by the international community.
It was clear to all that before 1972, when Saddam Hussein nationalised Iraq's oil industry, international companies had paid a pittance to the resource's owners - the Iraqi people - for the oil they took out of the country. Iraqis, even Saddam, were justified in resenting that and putting a stop to it. That is not to say that oil was not a strategic consideration in the decision of George W Bush, the former US president, to oust Saddam. Given that Iraq sits on the world's third-largest proved oil reserves and has a huge potential for further discoveries, it could never have been far from his mind. That was clear from the vigorous measures US forces took to secure Iraq's oilfields and to protect its oil ministry when they marched on Baghdad.
But Iraqis would hardly have thanked the invaders for failing to protect their most valuable asset and only apparent source of future wealth. So the most that can be said is that the US may have waged war with the covert intention of ensuring the continued flow of oil from a major exporter to the international market. If the US troop presence was intended to increase the westward flow of Iraqi crude, it failed. US oil imports from Iraq last year were 21 per cent below their peak in 2001.
But that is not why the US is withdrawing its forces from the country. The troops are leaving because they are causing more security problems than they are solving, because their continued presence in Iraq is a heavy burden to US taxpayers and a political liability, and because an elected Iraqi government has asked them to go. The Bush administration was less than forthright about its motives for invading the country, leaving ordinary Americans to jump to ill-informed conclusions. There were also misconceptions within Iraq. One was that international oil firms, after complaining for years about being shut out of the world's best oil projects, would fall over each other to gain access to the country's biggest oilfields on any terms.
Last week's public auction of Iraqi oil licences on live TV put paid to that notion. The bidders walked away from contracts to produce oil from Iraq's biggest fields, figuring that the deals held risks that outweighed any reasonable chance of reward. The auction's progress seemed to take bidders and organisers by surprise. For each field, the bidding consortiums dropped sealed offers for the development contract into a large plexiglass box. Then the oil ministry announced what it was prepared to pay, eliciting gasps from the executives assembled in the conference room of a Baghdad hotel. The fees on offer turned out to be far below what they expected.
In the end, only one contract of the eight on offer was awarded, after an alliance of BP and China National Petroleum Corporation agreed to halve their price to raise output from Iraq's biggest oilfield. For the smaller fields, the gaps between the bidders' requested payments and the government offers were too wide to be bridged. Were the miserly ministry offers serious when the foreign firms had been asked for big upfront payments on contracts that could easily be rescinded? And would those foreign firms risk financial penalties if they missed production targets for any number of unforeseeable reasons?
Or was the auction a political show staged to convince the Iraqi people of the lengths to which the government would go to protect the nation's oil wealth from rapacious foreign interests, before they voted in the Jan 31 parliamentary election? The offers must have been serious as Dr Hussein al Shahristani, the oil minister, had staked his political future on the auction's outcome. Dr al Shahristani has faded into the background since announcing the results.
Meanwhile, Ali al Dabbagh, the government spokesman, said the bidding round "didn't achieve the full objectives of the ministry of oil". For their part, foreign oil executives may have had unrealistic expectations of what Dr al Shahristani could afford to offer in the intensely nationalistic political climate of post-war Iraq. But Iraq also has to stop thinking that imposing sovereignty over its resources means denying companies a reasonable return.
To achieve the nation's goals, both sides must profit. @Email:email@example.com