In June 2001, both France and Russia proposed in the U.N. Security Council that the 1991 U.N. Sanctions against Iraq be lifted, thereby allowing foreign investment in to the deteriorating Iraqi oil infrastructure. However, this proposal was predictably killed by the U.S. and U.K. The total value of Saddam's foreign contract awards was estimated at $1.1 trillion, according to the International Energy Agency's World Energy Outlook 2001. Of course since 1991 American companies have been barred from investing in Iraq, and if the sanctions had been lifted, numerous oil lease contracts awarded to France, Russia, China, and Italy could legally begin. The neocons were not going to allow that to happen. Period.
Regarding Iraq's oil reserves, apparently the lack of spare parts and inability to conduct engineering repair to the reservoirs throughout the 12-years of comprehensive U.N. sanctions (1991 to 2003) may have resulted in severe and potentially permanent damage to Iraq’s major two oil fields.
If these reports are even only partially accurate, Iraq’s oil production capability may *never reach the 5-6 million barrels per day estimates that were claimed possible before the war.* Given these disconcerting issues, some experts have recently downgraded Iraq’s oil reserve figures to approximately *half* of what is publicly reported as Iraqi’s reserves of 112.5 billion barrels. In June 2001 the U.N. reported that without immediate and extensive repairs of Iraq’s two main reservoirs, the fields may become permanently damaged, thereby significantly decreasing the amount of recoverable oil.
The January 2004 Newsletter for the Association for the Study of Peak & Oil (ASPO) inferred that Iraq’s oil reserves are more likely in the 50 billion barrel range when one omits obviously “political oil” reserve revisions that OPEC engaged in during the late 1980s.
“The report says that it may now be possible to recover only 15% to 25% of the oil in place. Meanwhile the occupying forces are concentrating on trying to repair the surface facilities being hesitant to address the subsurface for fear, as the New York Times no less admits, the objective of the invasion should become self-evident. It looks as if a serious downward revision of Iraq’s future production potential is called for. The published Reserve estimate of 112.5 Gb looks increasingly unreliable.
Perhaps it makes more sense to revert to something around 50 Gb, closer to what was reported prior to the anomalous jump to 100 Gb in 1988, when the OPEC countries were vying with each other for quota based on reported reserves.”
“Iraq Reserves,” The Association for the Study of Peak Oil & Gas (ASPO), Newsletter No. 27, January 2004
http://www.asponews.org/HTML/Newsletter37.html
This 2001 U.N. report likely presented a paradox for the Bush administration, had the 1991 UN sanctions been lifted, the French, Russians and Chinese oil leasing contracts could have been legally implemented. These nations would then have been in the enviable position of pouring massive reinvestment into Iraq’s oil sector in an effort to make the necessary upgrades and engineering repairs.
On other hand, lifting of the U.N. sanctions would have most likely denied the major U.S./U.K. oil companies from that $1.1 Trillion worth of Iraqi oil leases/contracts. Given the disconcerting reports of deterioration regarding Iraq’s major oil reservoirs, a larger question should have been contemplated in 2001 – what course of action in Iraq would be beneficial to humanity itself?
It was not in anyone’s interests, including the people of Iraq, or the international community, to allow the precious oil reserves of Iraq to be adversely affected and perhaps permanently damaged due to the insistence of continued U.S./U.K. sponsored sanctions.
Of course, two years later in March 2003, a U.S. military invasion toppled Saddam, and the post-war oil contracts have apparantly been strictly limited to the war’s “coalition partners,” which in this case included U.S. oil companies, British Petroleum (BP) and the Worley Group, an Australian oil engineering firm.
(FWIW: The ongoing violence has not allowed much repair and oil infastructure restoration to begin, complicated by the fact that much of the oil hardware is of older Russian design, while numerous power generators are of French origin, and of course those foreign companies have not been offered to do any of the repairs. Halliburton holds those contracts...please see Dick Cheney for details)