Iraq and the Battle for Oil. A Historical Insight

Excerpt from The Control of Oil. 1977.

by John M. Blair
Global Research, May 17, 2011
- 1977-07-01

Oil Companies Hold Down Production in Iraq

The following test is an excerpt from The Control of Oil (New York: Pantheon, 1977 pp. 80-90

In this excerpt, John Blair shows how the US and UK companies held down production in their Iraq concessions, in order to maximize their worldwide profits. In spite of protests from the Iraq government, and opposition from their French partner, the Anglo-American companies maintained this policy until nationalization in 1972. In the last part of this excerpt, we see the active role of the US State Department in defending the oil companies' interests.

Although its original concession of March 14, 1925 covered all of Iraq, the Iraq Petroleum Co., under the ownership of BP (23.75%), Shell (23.75%), CFP (23.75%), Exxon (11.85%), Mobil (11.85%), and Gulbenkian (5.0%), limited its production to fields constituting only one-half of 1 percent of the country’s total area. During the Great Depression, the world was awash with oil and greater output from Iraq would simply have driven the price down to even lower levels. Delaying tactics were employed not only in actual drilling and development, but also in conducting negotiations on such matters as pipeline rights-of-way. While such tactics ensured the limitation of supply, they were not without their dangers. If the Iraqi government learned that IPC was neither actively seeking new fields not exploiting proved and productive areas, it might withdraw or narrow IPC’s concession, or worse, award it to some independent willing and anxious to maximize production.

Suppression of Discoveries

From almost the beginning of its operations IPC not only suppressed production in Iraq (as well as in nearby lands) but went to considerable lengths to conceal that fact from the Iraqi government.

Of the many concession areas exclusively preempted by IPC, none was rapidly developed. IPC had held the area east of the Tigris River in the Mosul and Baghdad vilayets since1931, and by 1950 the only developed field was Kirkuk. Qatar is another illustration of “sitting onâ€