++ [ originally posted by Torkel
] ++
What do you mean "economics have been taking over"? I don't quite understand your sentence here, sorry.
Ok...
Bush and his team care more about economics than politics. Certainly, Iraq campaign was neither about "liberating the free people of Iraq" or "finding weapons of mass destruction". It was about oil, or the security of future oil supply to be exact.
Daily demand of oil worldwide is currently 67-69 million barrels per day. Iraq, as a second oil-rich nation in the world, is a fruitfull piece in this cake. Before the first Gulf War it was supplying 12 million barrels, which was later limited to 1 million in the framework of the "Oil for Food" program. The potential daily output though is at about 15-17 million barrels (from various sources). What Bush wants to secure is this oil. Now certainly, it belongs to the people of Iraq, but it's not that easy.
Oil companies, such as Exxon, BP, Shell, etc., when operating in developing countries, normally sign PSAs (Product sharing agreements) with local goverments. For example, BP has formed a consortium for development of Azeri-Chirag-Guneshli oilfield here in Azerbaijan. Agreement was signed in 1994 among Azerbaijani gov-t, BP, and 11 other participating oil companies. So, the oil companies invest around $30 billion over 15 years into development of this oilfield. When the oil flows in 2008 (1.2 million barrels per day), the profits will be accordingly shared among parties which invested in it. The stake of Azerbaijan government was 25%. This means that in 2008 when we start to sell oil only 25% of the profits will go to the country.
Why is this done? Because local governments neither have the money, nor technology, nor qualified staff to run projects of such a scale. So they (local gov-ts) invite oil companies to come and explore national oilfields.
That's exactly what will happen in Iraq. Tensions with European countries? Of course, French, Russian and German companies were the ones cooperating with Saddam's regime and now the American's don't want to let this go. They say "hey, we've liberated Iraq, so we'll be the ones eating fruits". It will be BP, ExxonMobil, Texaco, Hulliburton and Bechtel which will get ALL the multibillion dollar oil and civil contracts.
Just to get you an idea of how much money that is. If we take Iraq's proven reserves (supply of 12 million barrels per day). Let's say the PSA stake on average will be 40% to Iraq and 60% to the oil companies (very rarely happens, so basically a worst case scenario).
7.2 million barrels * $30 dollars per barrel = $216,000,000 of revenue per day. Let's cup operating expenses, and assume that pure profit is $180 millions per day. This makes $5.4 billion per month. $64.8 billion a year.
And that's just oil. Then you have construction of roads, factories, hospitals, airports, etc. I can't calculate that, but it's a LOT of money, which will mainly go to American companies.
On the other hand, securing a supply of 12 millon barrels per day (which is some 17% of world's output) is a very significant figure. OPEC, which controls some 40% of the market will no longer be a dominant player, especially after Azerbaijan's and Central Asian oil will start flowing in 2008- 2011. The US will eventually control world's oil supply, which will allow them to control its price and output.
So in the long-run, current Iraq campaign is economically very feasible for the United States. Bush has made a lot of mistakes- talking about spreading democracy and finding the weapons and many other things. He shouldn't have lied. But now it is too late. He can't turn around and say "Hey, I've been lying to you for 4 years, please forgive me, I won't do it again".
Buy on AliExpress.com
Well maybe a better word for it is a flat out idiot. One of those idiot terrorists, who rediculously waste their already pathetic lives for a stupid cause started by the biggest coward himself Bin Laden, cannot change how things are in the world. The terrorists will never win.
