The French oil connection
THE FRENCH WAR FOR OIL
By KENNETH R. TIMMERMAN
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March 16, 2004 -- MANY Americans are convinced even today that the war in
Iraq was all about oil. And they're right - but oil was the key for French
President Jacques Chirac, not for the United States.
In documents I obtained during an investigation of the French relationship
to Saddam Hussein, the French interest in maintaining Saddam Hussein in
power was spelled out in excruciating detail. The price tag: close to $100
billion. That was what French oil companies stood to profit in the first
seven years of their exclusive oil arrangements - had Saddam remained in
power.
The French claimed their opposition to the U.S.-led war to oust Saddam
Hussein was all about policy. The editor of the Paris daily Le Monde,
Jean-Marie Colombani, just resuscitated those arguments in an editorial that
singled out George W. Bush as "a threat to the very foundation of the
historical alliance between the U.S. and Europe," and called fervently for
the election of John F. Kerry. (I guess that F now stands for France.)
But Colombani, whose paper's coverage of the war in Iraq was noteworthy for
its wanton disregard for the truth, had not a word to say about his
country's war for oil. Indeed, the secret deals the French state-owned oil
companies negotiated in the 1990s with Saddam Hussein went widely unreported
in France.
Almost as soon as the guns went silent after the first Gulf war in 1991,
French oil giants Total SA and Elf Aquitaine - who have now merged and
expanded to become TotalFinaElf - sought a competitive advantage over their
rivals in Iraq by negotiating exclusive production-sharing contracts with
Saddam's regime that were intended to give them a stranglehold on Iraq's
future oil production for decades to come.
The first of two massive deals was announced in June 1994 by then-Iraqi Oil
Minister Safa al-Habobi - a well-known figure whose name had surfaced in
numerous procurement schemes in the 1980s in association with the Ministry
of Industry and Military Industrialization, which supervised Saddam's
chemical, biological, missile and nuclear-weapons programs.
Speaking in Vienna, al-Habobi confirmed that his government was awarding
Total SA rights to the future production of the Nahr Umar oil field in
southern Iraq, and that Elf was well-placed to be awarded similar terms in
the Majnoon oil fields on the border with Iran.
Those two deals, which I detail in "The French Betrayal of America," would
have been worth an estimated $100 billion over a seven-year period - but
were conditioned on the lifting of U.N. sanctions on Iraq. Simply put,
analyst Gerald Hillman told me, the French were saying: "We will help you
get the sanctions lifted, and when we do that, you give us this."
The Total contract, a copy of which I obtained, was "very one-sided," says
Hillman. (Hillman, a political economist and a managing partner at Trireme
Investments in New York, did a detailed analysis of the contract.) An
ordinary production agreement typically grants the foreign partner a maximum
of 50 percent of the gross proceeds of the oil produced at the field they
develop. But this deal gave Total 75 percent of the total production. "This
is highly unusual," he said. Indeed, it was extortion.
But Saddam willingly agreed: He saw the Total deal, and a similar one with
Elf, as the price he had to pay to secure French political support at the
United Nations.
Much has been written in recent weeks about the corruption of the U.N.
Oil-for-Food program. Documents uncovered in Iraq's oil ministry and
published by the Baghdad daily al Mada list several cronies of French
President Chirac among those who had received special oil allocations as a
political payoff from Saddam.
But the amounts attributed to these individuals - in the tens of millions of
barrels, on which they stood to earn between 25 to 40 cents per barrel -
pale in comparison to the $100 billion payoff orchestrated by Chirac and
Saddam.
No, oil wasn't the only reason France opposed the United States at the
United Nations in the lead-up to the war. The megalomania of Foreign
Minister Dominique de Villepin (who lied to Secretary of State Colin Powell
repeatedly and later boasted about it to visiting U.S. congressional
delegations) certainly entered into the mix. So did French pride, wounded at
the realization that France is no longer the great power it once was.
But the French did not merely disagree with the United States over Iraq, as
did a certain number of our allies: They actively sought to rally world
leaders and public opinion to treat the United States - not Saddam Hussein -
as the enemy.
The enormous difference between those two positions - legitimate dissent and
active subversion of America's right to self-defense - is why America is
right to treat France as a former ally. Under Chirac's stewardship, France
has shown the world that it cared more about propping up a murderous
dictator than it valued its 225-year alliance with America.
Kenneth R. Timmerman is a senior writer for Insight magazine. His book "The
French Betrayal of America" is just out.
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