As the troops withdraw, the oil execs move in...

| 7th July 2009
Dan Box
As US troops pulled out of Iraq last week the bidding for the country's oil fields began. Big Oil makes for epic (tragic) drama says Dan Box

On a makeshift parade ground in Baghdad last week, US generals swapped their lead roles for a supporting act as their troops began withdrawing from Iraq. The story appeared in newspapers around the world. But for real drama, you had to turn to the business pages.

As Iraq celebrated its freedom with a military parade, at a televised auction at the al-Rasheed Hotel, near Baghdad's Green Zone, a cast of men in suits started bidding for the country's future.

On the block were the country's oil fields, the world's third largest proven reserves, largely unexplored and untapped. An Anglo-Chinese consortium led by BP won the rights to Rumalia, a vast oil field in southern Iraq. It was a big moment; for the first time in a generation, after being thrown out of the country in 1961, BP was back in Iraq.

It helps to look at Big Oil as epic drama, like Wagner with wells. As an example, a few years ago the company's then boss, John Browne, was a man known quite seriously across the industry as the Sun King.

Meeting Lord Browne in 2005 was equally theatrical. He was then at the height of his powers and, shown into the company boardroom, I waited in silence. Without warning, the entire glass wall of the room slid open silently and through it pottered a short, slight man, smiling amiably. He sat down at the head of the long board table, leant back and lit a large Cohiba cigar. His smile widened.

BP's performance - its ability to take oil and make money - Browne told me, was "staggering". He was right. Last year, its total revenues (how much money the company made) were $365.7 billion, more than three times Iraq's entire GDP (how much money the country made). The contrast is telling, because BP's powerful imperial history is itself bound up with that of Iraq.

In 1912, BP, then called the Anglo-Persian Oil Company, helped set up the Iraq Petrol Company, which controlled oil production in the country for almost 40 years despite Iraqi attempts to break the stranglehold. Then, the British government was the hidden power behind the company and maintained a military occupation of Iraq at least in part to ensure a flow of oil from the country's wells.

In 1961 Iraq rose up, nationalised the IPC and threw BP out. Waiting in the wings ever since, it has only now returned to centre-stage.

As with any epic, among the drama, there is also tragedy. Browne quit after lying to a court about how he met his lover, a former rent boy, on a gay website. From Sun King to Suited and Booted. Under his leadership, BP had begun to eye up renewables, introducing an internal carbon trading scheme and helping the British government design its own, both of which preceded the current EU system. Browne's successor, Tony Hayward, has looked elsewhere. His gaze has settled on Iraq, leading the company back to its past.

So, US troops may today be pulling out of Iraq, but the grim drama continues. Big Oil is epic theatre, something best captured perhaps - outside real life at least - in the book ‘Oil!'. The name of the film version? There Will Be Blood.




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