| HIGHLIGHTS OF DAWN | April 2003 |
Coveting Crude Oil
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“Go to now, ye rich men, weep and howl for your miseries that shall come upon you.” |
FOR MONTHS THE MEDIA has carried news about the inspections of the United Nations in Iraq to uncover weapons of mass destruction. Paralleling this news is that of the United States of America’s preparations for war and invasion of Iraq to destroy weapons of mass destruction, and to oust Saddam Hussein from power. As an explanation for all of this activity there appeared in the February 2003 issue of the World Press a feature article entitled, “Coveting Crude, The Unquenchable Thirst For Oil.” This consisted of six excerpts from the news media of four countries, all commenting upon the particular thirst of the United States for oil. The most pointed of these came from Mexico.
The Mexican left-wing paper, LaJornada, published in Mexico City on December 8, 2002 an article entitled “Playing into Saddam’s Hands,” with a subheading, “Baghdad Profits from Bush’s Threats.” The article said:
“The threats by the United States against Iraq have set off an intense diplomatic campaign by Saddam Hussein’s government—one that, up till now, has continued to score successes.
“It is apparent, for example, that if there is an invasion, after a brief spike in the price of oil, which could be caused by the massive destruction of wells and pipelines, there would be a brutal plunge in price per barrel. The privatization of the Iraqi oil industry and the quadrupling of daily output—which Americans are studying as a means to ease the U.S. and world economic crisis by lowering consumer energy prices—will cause this drop to occur. It will be disastrous for the producer nations and, above all, for the Arab countries and Iran.
IRAQ’S STRATEGY
“The prospect of witnessing the death of the Organization of the Petroleum Exporting Countries (OPEC), and seeing world conditions return to those before 1974, when oil prices were ridiculous and the major British-American companies controlled the market, tends to unite the other oil-producing nations of the region behind Iraq. They realize they would be victims of the same plan and the same war that today threatens Iraq’s sovereignty and territorial integrity. That is why there have been important high-level meetings in the last two months between Iraqis and Iranians (despite the bloody war and eight years of confrontation between the two countries), between Iraqis and Russians, between Iraqis and European diplomats and business people, and between Iraqis and the royal courts of Saudi Arabia or the Emirates.
“Now Saddam Hussein is telling Kuwait he is sorry for the invasion that ignited the Gulf War, hoping to gain the benevolence of the Kuwaitis to affirm Arab unity. This would be a part of a broader front of oil-producing nations that aims to counter George W. Bush’s policies—his crusade that considers Iran, Saudi Arabia, Syria, and Libya, among other countries, to be members of what the American president considers the axis of evil.”
The article also went on to say: “And it will not be possible to return to this era in terms of colonial exploitation of oil resources without going back, at the same time, to the political identities that people possessed during those years of hatreds and hopes. At the same time, and as part of its campaign, Iraq has signed important trade agreements worth tens of billions of dollars of petroleum with oil companies from Russia, Europe, and China. These agreements permit the exploitation of its enormous oil reserves, the world’s second-largest after Saudi Arabia. The contracts are aimed at countering the Americans’ promises to corporations in other countries that would participate in the distribution of Iraq’s oil booty once Saddam Hussein has been overthrown and the United States has installed a client regime in power in Baghdad.
“These agreements signed behind America’s back have worked to create shared interests among Baghdad, Moscow, and the European capitals. These interests not only oppose Bush’s policy and war but also the blockade that bars Iraq from selling more oil than the United Nations permits. The blockade is preventing the companies that now have contracts to exploit Iraqi oil from making millions in profits.
“Thus Baghdad has created a front opposing the war and the blockade that is strangling it. George W. Bush has already succeeded in ending Saddam Hussein’s isolation and in getting a rebuff from the U.N. inspectors, in addition to increasing disagreements with his former European and Russian allies. If Bush continues to move with such arrogance and clumsiness, he may even convert his despised enemy into a nationalist leader or a martyr.”
OPEC’S STRATEGY
The impact that the threat of war has on OPEC was the subject of another article in the Pan Arab publication, Al-Hayat, published in London, England on December 11, 2002, under the caption of “OPEC and the Chance of War.” It said:
“The ministers of the member states of the Organization of the Petroleum Exporting Countries (OPEC) are convening a meeting tomorrow in Vienna under the pretense of weighty international matters and looming questions pertaining to the fate of nations most related to the global oil market, especially the United States. The most important of these questions are: Will the United States initiate a war on Iraq, and when? As for Iraq, a principal nation in OPEC, it has a current daily export capacity [quota] above 2 million barrels of oil. Yet the remaining problems with the international embargo commission, and continued tension between Iraq and the United States, have contributed to fluctuations in Iraq’s level of oil exports.
“Last week, Iraq’s oil exports reached 1.4 million barrels a day. Its high point was 1.7 million barrels when the United Nations debated and voted on Resolution 1441. Considering this, an OPEC minister predicted that if war against Iraq became imminent, prices would first greatly increase, then fall to previous levels, and then decrease.
“Iraq is not the only matter that OPEC members must consider, however. The fact is that Venezuela, South America’s largest oil producer, is witnessing political uncertainty, and there is an atmosphere of a civil war between Venezuelan President Hugo Chávez and the opposition, which is growing in size daily. A workers’ strike in the oil sector (the state-owned oil company Petróleos de Venezuela) has contributed to a decrease in production to half the [original] level, which was approximately 3 million barrels a day; production even came to a complete standstill yesterday.
“Nigeria is the other oil country that is witnessing continued political instability and security tensions that affect oil refineries and the oil sector. Thus, a number of questions concern Nigeria’s oil production capabilities in the future.
“Because of disturbances in these oil nations and the fact global reserves are at a depressed level, oil prices will remain inside OPEC’s framework of $22-$28 per barrel—that is, unless the winter in the West becomes even more severe. Keep in mind, though, that this is the price even after OPEC nations have increased their production more than 3 million barrels per day over the official production cap decided upon at their last meeting in Osaka, Japan [in September 2002].
“Because of the likelihood that the American economy might weaken further and the global impact of this, some oil-producing nations feared a large decrease in the demand for oil. They have therefore failed to abide by OPEC quotas on their production caps. They now, however, can use the pretense of political developments in Iraq, Venezuela, and elsewhere to raise the official production cap in such a manner that it will resemble actual production rates, which is recommended during tense political times.”
An article from The Guardian, a liberal English newspaper, published in London on November 22, 2002, described how the Iraq Petroleum Company brought into existence the present oil industry in Iraq. The legal battle that occurred when the Iraqi regime nationalized the industry is told and how a major legal battle is anticipated if a change in the Iraqi regime should occur. The article, “The Mother of All Legal Rows,” said:
WHO WILL OWN THE OIL?
“All the players in the current quarrel can agree on one thing—Iraq has the potential to become a great oil nation again. There is a huge gap between the trickle of oil coming out of Iraq today and its capabilities.
“According to the Organization of the Petroleum Exporting Countries, the entire world’s known oil reserves run to 1,000 billion barrels. Iraq claims a 10th of this, just over 100 billion barrels. However, in an interview before the current conflict, Taha Hmud Moussa, then Iraq’s deputy oil minister, said the oil ‘will exceed 300 billion barrels when all Iraq’s regions are explored.’ If true, this means Iraq has a quarter of the world’s oil. The United Kingdom’s North Sea reserves are 5 billion barrels, and we are the European Union’s largest oil producer. Iraq’s oil is not miles offshore under a treacherous sea. This makes it cheaper than the oil Britain produces.
“John Teeling, head of one of the few Western companies to admit to working in Iraq, is exultant. His Dublin-based company, Petrel Resources, is keen to develop unexplored oil fields. This oil could cost as little as 97 cents a barrel. ‘Ninety cents a barrel for oil that sells for $30—that’s the kind of business anyone would want to be in.’
“Last month, behind the closed doors of the Royal Institute of International Affairs, leading oilmen, exiled Iraqis and lawyers held a meeting entitled “Invading Iraq: Dangers and Opportunities for the Energy Sector.” One delegate said the entire day could be summarized as “Who gets the oil?”
“History can reveal much of how this may end. Iraq’s oil was originally developed through a consortium called the Iraq Petroleum Co. (IPC)—split roughly a quarter share to British Petroleum (BP), Shell, and the forerunner to Total, with the remainder owned mainly by Standard Oil and Mobil. But, in 1972, it was nationalized by the revolutionary Iraqi regime. Negotiations over nationalization were fierce, and Geoffrey Stockwell, who headed the IPC team, had some extraordinary clashes with both Saddam Hussein and Iraq’s vice president, Salih Mahdi Ammash. Ammash said Iraq would ‘go through any battle with the companies that was necessary’ and resort to ‘all means necessary.’ The companies would also ‘lose Saudi Arabian and Kuwaiti oil, because if their Arab brethren did not stand by Iraq, they would use force to stop this oil flow.’
“After a painful battle, the IPC finally signed the nationalization agreement on February 28, 1973. Today, if ‘regime change’ happens, we could see three of the world’s largest public companies—BP, Shell, and ExxonMobil—fighting for their old IPC possessions. Back in the 1970s the IPC was compensated for its lost oil fields, and that would normally end any future rights they might have. However, they may well try to show that the compensation deal was signed under duress.
“‘If you argue there is something amounting to duress, then you could argue the compensation agreement is invalid,’ says Professor Thomas Walde, formerly principal United Nations interregional adviser on oil and gas law. ‘If I were their [the companies’] adviser, I would develop this into a bargaining chip with the new government. It would play a role in the race for getting new titles.’
“The stakes are high. Iraq could be producing 8 million barrels a day within the decade. The math is impressive—8 million times 365 at $30 per barrel, or $87.6 billion a year. Any share would be worth fighting for.
“The stakes are equally high for the French, Russians, and Chinese. It is striking that the three countries that delayed America’s new U.N.-Iraq resolution all have potentially massive oil pacts there. Saddam is believed to have offered the French company TotalFinaElf exclusive rights to the largest of Iraq’s oil fields, the Majnoon, which would more than double the company’s entire output at a stroke. Meanwhile, Russia and China have sought various deals on the super-giant West Qurna and Rumaila fields, respectively. The Russian company Lukoil has been assured it will not lose its stake in the 20-billion barrel West Qurna field.
“Former CIA Director James Woolsey recently told The Washington Post: ‘France and Russia have oil companies and interests in Iraq. They should be told that if they are of assistance in moving Iraq toward decent government, we’ll do the best we can to ensure the new government and American companies work closely with them. If they throw in their lot with Saddam, it will be difficult, to the point of impossible, to persuade the new Iraqi government to work with them.’
“Experts on international law seem not to be on Woolsey’s side, however, and a new Iraqi government may have little choice but to work with Saddam’s current friends. ‘The majority opinion is that if a government creates a [legal] title, it survives a change of government,’ says professor Walde.
“Should ‘regime change’ happen, one thing is guaranteed—shortly afterward there will be the mother of all legal battles.”
VENEZUELAN CRISIS
Three other articles were included in this series, two published in Russian newspapers. One published in Moscow, the Kommersant, a business-oriented journal, in an article entitled, “The Second Oil War,” told of the general strike in Venezuela that brought Venezuelan oil industry to a halt. The controversy between the opposition and President Hugo Chávez continues as endeavors to oust him from office have not succeeded. The country is on the brink of a revolution. Venezuela is the fifth largest exporter of oil in the world and the second largest supplier to the United States. The country is on the verge of economic collapse since it is so highly dependent on the oil industry. If the political situation should be settled, they would greatly increase oil exports and that would benefit the United States. Because of the political chaos in Venezuela, oil prices have increased.
THE RUSSIAN PIPELINE
Another Russian newspaper, Izvestiuya, published in Moscow on November 27, 2002, an article, “A Competitive Northern Pipeline” which tells of a 4 billion-dollar project to construct a pipeline to Murmansk. This will supply a new export route of Russian oil to the United States by 2007. By 2010 Russia expects to supply 13% of the United States needs.
A final article published by the South African Business Day in Johannesburg on December 10, 2002 entitled, “U.S. Eyes West African Crude” relates the new oil rush for African oil. As exploration continues for African oil, the United States, which currently imports 15% of its needs from Africa, is expecting to import 25% by 2015.
All industrialized countries need oil as a source of energy. Our forefathers knew very little about oil as a source of energy. It is interesting to note how Biblical prophecy, in particular Daniel 12:4 which says, “Thou, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased,” was made possible by God’s advance planning. As the ‘time of the end’ (of this old order upon the earth) began with the nineteenth century, so too the Industrial Revolution (denoted as a period in British history from 1750 to 1850) was changing from a stable agricultural and commercial society to an industrial one which relied on complex machinery rather than tools. Such changes took place in other countries at a later date, coinciding more with the nineteenth century.
The factory and complex machinery needed steel and fuel. Both iron ore and coal were found in close proximity in England to provide steel for machinery and coke for the steel industry, as well as for fuel for the highly improved James Watts steam engine. As God prepared the earth for human habitation, in those Creative epochs he laid down these materials and also the crude oil reserves. Soon the steam engine gave place to the diesel engine and the electric motor. With advancement of knowledge caused by God, mankind found the necessary fuel for the energy needed to fulfill prophecy.
THE ONLY SUPERPOWER
In the ensuing years, the United States emerged as the forerunner of advancing nations, as the champion of liberty and democracy, and as the richest nation in the world. Its wealth, however, depended heavily on an ample supply of fuel. The United States first found oil in 1856 in northwest Pennsylvania. Oil has been found since then in other parts of the United States, and offshore in the Gulf of Mexico and Pacific Ocean. It has never been enough to supply the needs of its industry and life style. As the richest nation in the world, it depends heavily on crude oil to maintain its position in the world, and currently is the only superpower.
The Lord’s people know that the position of any individual or nation is according to God’s will. Hannah, the mother of Samuel, beautifully expressed this principle when she said, “The Lord killeth, and maketh alive: he bringeth down to the grave, and bringeth up. The Lord maketh poor, and maketh rich: he bringeth low, and lifteth up.” (I Sam. 2:6,7) Is the threatened war against Iraq a form of imperialism to get an assured supply of oil as implied by other nations? Or is it a sincere effort to protect the American people against weapons of mass destruction? There was only one period of time that the United States went to war and took lands in an imperial fashion. That was the Spanish-American war in which the Philippine Islands, Cuba, and Puerto Rico ended as possessions of the United States. At that time the United States was accused of imperialism.
THE LEVELING OF SOCIETY
There is a great disparity between the poor and rich in every nation and between nations. We have very poor and very rich countries. This disparity becomes worse with time. God’s plan is to remove this disparity. John the Baptist, in preparing the way for our Lord’s ministry, fulfilled the prophecy of Isaiah 40:3-5, which is quoted in Luke 3:2-6: “…the word of God came unto John the son of Zacharias in the wilderness. And he came into all the country about Jordan, preaching the baptism of repentance for the remission of sins; As it is written in the book of the words of Esaias the prophet, saying, The voice of one crying in the wilderness, Prepare ye the way of the Lord, make his paths straight. Every valley shall be filled, and every mountain and hill shall be brought low; and the crooked shall be made straight, and the rough ways shall be made smooth; And all flesh shall see the salvation of God.”
This prophecy of every valley (all the poor and lowly individuals and nations) being filled (exalted) and every mountain and hill (all the rich and exalted people and nations) being brought low, was only partially fulfilled at our Lord’s first advent. He made it possible for the publicans and sinners to become candidates for the High Calling and those who sat in Moses’ seat and considered themselves children of the kingdom to be cast out into outer darkness. As Hannah prophesied in her prayer, “He raiseth up the poor out of the dust, and lifteth up the beggar from the dunghill, to set them among princes, and to make them inherit the throne of glory: for the pillars of the earth are the Lord’s, and he hath set the world upon them. He will keep the feet of his saints, and the wicked shall be silent in darkness; for by strength shall no man prevail. The adversaries of the Lord shall be broken to pieces; out of heaven shall he thunder upon them: the Lord shall judge the ends of the earth; and he shall give strength unto his king, and exhalt the horn of his anointed.”—I Sam. 2:8-10
When the church is completed then the great leveling of earth’s society will begin. The poor of this world and nations will be exalted, and the rich individuals will be brought low. All will be equal in God’s kingdom. Those who were rich fraudulently will be judged as prophesied in James 5:1-6, whether individuals or nations. God’s judgments are true and righteous and in that kingdom this will be recognized as they all praise God in the words of Psalm 67:1-7, “God be merciful unto us, and bless us; and cause his face to shine upon us; Selah. That thy way may be known upon earth, thy saving health among all nations. Let the people praise thee, O God; let all the people praise thee. O let the nations be glad and sing for joy: for thou shalt judge the people righteously, and govern the nations upon earth. Selah. Let the people praise thee, O God; let all the people praise thee. Then shall the earth yield her increase; and God, even our own God, shall bless us. God shall bless us; and all the ends of the earth shall fear him.”