Does Bush covet Saddam's oil?

Does the United States want to oust Saddam Hussein to seize his oil?

To the conspiracy theorists, it looks obvious. Oilman President George W. Bush's goal of removing the Iraqi leader to save the world from weapons of mass destruction is just a pretext for the United States getting its hands on Baghdad's oil.

Ranked second only to Saudi Arabia, Iraqi reserves of crude would provide rich pickings for US oil companies increasingly reliant on Middle East energy imports.

The United States, the argument goes, could wean itself from oil dependence on Saudi Arabia, out of favour since the September 11 attacks, committed mostly by Saudi nationals.

"I think the real objective is long term, in putting a friendly government in Baghdad - as Iraq is the only country that can replace Saudi Arabia," said Mustafa Alani, a London-based Iraqi analyst.

"From the 1960s the US supported the Shah of Iran, then the weight of the partnership moved to Saudi Arabia. Following September 11 there is a strong feeling that Saudi is not a strong partner - they believe Iraq is a strategic necessity," Alani said.

But many energy experts question whether the US would launch a war effort designed to capture Iraq's oil when the campaign could put national energy security at risk by causing upheaval across the entire oil-rich region.

A cornered Saddam could lash out at oil facilities in neighbouring countries, send oil prices skyrocketing and damage the US economy.

Surely the risks for energy security could outweigh the potential rewards?

"A more likely scenario is one in which the military intervention causes domestic political chaos in Iraq, inaugurating a long period of instability," said Robert Mabro, director of the Oxford Institute for Energy Studies.

"In that case there will be no growth in oil output; even worse Iraqi oil production may fall below current levels."

Anthony Sampson, author of the award-winning 1970s analysis of the oil majors, the Seven Sisters, argues the intervention could lead to an era where US big business is the greatest loser.

Oil companies have reaped extra profits from this year's 40 per cent rise in oil prices to $30 a barrel, caused by the fear of war in Iraq.

"But their long-term prospects depend on operating in a stable environment, where investments and contracts will be secure," Sampson wrote recently.

The notion that US foreign policy is driven by commercial interests also is not borne out by long-standing and unilateral US sanctions on oil nations Iran and Libya.

Much to the chagrin of the oil companies eager to join their European rivals in those countries, domestic US political considerations have kept those doors closed.

Meanwhile there are no plans to be found that would indicate a US strategy for Iraqi oil post-Saddam.

Though US oil companies are happy to admit that, given half a chance, they would be in Iraq, leading oil consultancies and the Iraqi opposition deny being asked by Washington to chart post-war oil scenarios.

If stability could be guaranteed, there is no doubt the prospects in Iraq after Saddam look very promising.

US cash and cutting-edge technology could be put to swift use to get the wells pumping at 11 of Iraq's most lucrative oilfields featured in Baghdad's existing $20 billion development programme.

And Iraqi technocrats - having built up their pre-Gulf War infrastructure with equipment from the US, Britain and Germany - have made no secret of their preference for Western firms.

Under sanctions, Baghdad has deals in principle with companies from countries demonstrating some political support - Russia, China and France.

In Iraq after Saddam, Moscow and Paris would fight hard to protect the commercial interests of Lukoil and TotalFinaElf, which already have exclusive rights on the biggest prospects.

But many think Baghdad's gameplan could change after a war, and probably in favour of US firms.

"The contract award system was only a method aimed at breaking UN sanctions," said a Gulf-based industry analyst. "Everything will be up for grabs once Saddam or the sanctions regime goes."

While many agree that rising US reliance on the Middle East gives its companies a powerful incentive for chasing Iraqi reserves, insiders deny oil is the guiding force behind Washington's desire to oust Saddam.

"There is no grand design in Washington for dealing with Iraq's energy sector in a post-Saddam world," said one Western diplomat familiar with US policy.

"Let's face it. The Middle East is where the oil is," he said. "But energy security is not at the forefront of US foreign policy."

So innocent, or guilty of coveting Saddam's oil? Speaking in Poland, US Commerce Department Under Secretary Grant Aldonas admitted the potential "benefits that would come from "opening up the spigot on Iraqi oil".

"That obviously isn't the point of any action taken against Saddam Hussein and Iraq but certainly it would be one of the results economically," he said.