Oil Theft That Pays and Stays

by Robert Anderson 

Where’s the outrage on seizing the $70 billion Libyan Sovereign Wealth Fund and redirecting it to Libyan rebels & elsewhere? Where’d the US and NATO get this authority? Its not right, and its déjà vu all over again on Chapter 2 of the Great 21st Century Oil War. Chapter 1 was Iraq. And don’t give me the malarkey that Qaddafi was a corrupt despot so it justifies such action. He was no more so than the rest of the Mideast including ‘our allies’ in places like Saudi Arabia. And if we are going to make corruption allegations we’d best not look in a mirror. Recently we’ve learned that $6.6 billion of a $12 billion fly-in-cargo-planeloads-of-money into Iraq is missing and probably stolen. Its incorrect to blame this on the Iraqis. The US was in charge of the provisional government there when the probable theft occurred. I’m betting it ended up going to a combination of Iraqis and U.S. war profiteers. Eisenhower was right about his military industrial warnings. Big planeloads of money in an insufficient checks & balances set-up couldn’t possibly turn out favorably. And here we are doing the same scandalous thieving in Libya a few years later. Same game. Different oilfields. Pick an eccentric dictator with extensive oil wealth, fire up the propaganda machine and take him down while shaking them down. “Hey. We can’t account for all this oil wealth. Its war!”

 And here’s a bigger graft outrage from our great oil war chapter 1 that wasn’t widely reported. It wasn’t just $6.6 billion in oil wealth stolen. There was probably an even bigger theft of oil! Here’s an article posted on my peak oil message board in 2007. I’ve posted there as DeRonin. This message board has been going strong since 1999! I’m glad we setup one section of Important Archieved Threads:

How Much Iraqi Crude Oil is Being Stolen?

“Rumors are rife among suspicious Iraqis about the failure to measure the oil flow. “Iraq is the victim of the biggest robbery of its oil production in modern history,” blazed a March 2006 headline in Azzaman, Iraq’s most widely read newspaper. A May 2006 study of oil production and export figures by Platt’s Oilgram News, an industry magazine, showed that up to $3 billion a year is unaccounted for…With billions of dollars to spend and extensive experience with oil infrastructure and Iraqi ports, Haliburton and Parsons seem unable to deal with the routine problem of broken meters at the Southern Iraq terminals….After the 2003 invasion, the meters appear to have been turned off and there have since been no reliable estimates of how much crude has been shipped from the southern oil fields.”

Got that? We took over Iraqi oil operations and intentionally didn’t fix the meters for 4 years at Basra through which all the Iraqi oil flowed at the time. There was no metering of the oil at the production point, the pipeline or the export port for 4 years! This was obviously intentional.

I learned this trick when I was entrenched in the Russian oil business when I worked for the Hermes Group in the mid-1990s. Under the communist system, the vehicles, buildings and oil were all government owned. No one got billed so no oil got metered. And when they shifted to a market system there wasn’t any rush to shift to metering. No records. No quantifying who’s getting what from who. Its an oil theft bonanza!

Wait a sec! This is hard to believe. What is the source of this article? You’ve never heard of CorpWatch? OK. How about an best selling author and former CIA agent writing in Time Magazine, backing it all up?

Who Is Stealing Iraq’s Oil?

By Robert Baer

“The Government Accountability Office is about to release a report that estimates 100,000 to 300,000 barrels of oil goes missing every month. According to the New York Times, the GAO will not offer a conclusion about what specifically is happening to the missing oil, other than it is probably lost to corruption, smuggling or just bad accounting.

Iraqis oil traders, on the other hand, tell me they think they know exactly where the stolen oil is going — the militias appropriate it to arm and feed the rank and file. The same traders also tell me there’s a lot more pilfered oil than the GAO acknowledges, and that the practice started as soon as Saddam fell.”

The lines to the north were out of service so it almost all came through Basra from '04-'08.

So nearly 10 years after we moved in and destroyed Saddam Hussein and much of Iraq, have you noticed the reports of ongoing water and power shortages there in spite of +$100 oil prices and the resultant oil revenue windfall? Now you know why. The post Saddam regime is just too corrupt. Oh that’s us? Oh well. Or actually its OIL WELL! On to Libya! Because oil theft that pays is oil theft that stays!


About OilisNotWell

I'm a proud, happy 4th generation Kansas Citian. I've been employed in downstream petroleum and biofuels for over 30 years. After eight years as a Refinery Rep and Midcontinent Marketing Manager at Wichita-based Koch Refining, I subsequently set up shop at the KC Board of Trade just off the Country Club Plaza. Back in the old pre-internet days, I actually launched the first faxed newsletter on oil markets in the world. It was highly regarded with 350 subscribers who were oil distributors, traders and oil industry executives. Subscription cost was $760/ year. I also worked for the Hermes Group which was the first Russian company to buy a seat on a U.S. commodity exchange (NYMEX). I wrote their international business expansion plan and traveled extensively throughout Russia, Ukraine and Eastern Europe. I've also literally worked for dozens of ethanol and biodiesel firms in the U.S. I enjoy spending our winters in Uruguay and Argentina when I can swing it.

Posted on June 18, 2011, in Uncategorized. Bookmark the permalink. Leave a comment.

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