Nexus - 0217 - New Times Magazine-pages

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reverse gear, dropping from 4,600+ down to 1,600 in less than nine months from late 1982 to mid-1983. For the oil industry it was a total nightmare with drilling contractors going broke overnight, while hundreds of multimillion-dollar oil rigs sat quiet- ly rusting in the deserts and mountains. If evidence was ever needed proving the size (and danger) of the Falklands reserves, this was it: the nations of the Middle East flooding world markets with crude oil from massive over-produc- tion, and halving their own revenues in order to halt western moves to exploit the massive South Adantic oil fields. The size of the catastrophe for the western oil multinationals was barely noticed by members of the public, who responded with ill-con- cealed glee to cheaper petrol prices at the pumps. Vast oil reserves in the South Adantic, initially merely tempt- ing, soon became a strategic imperative in the minds of the west- ern oil multinationals, frustrated by their continued inability to raise world oil prices. Reducing Middle East production to earlier, much lower levels was the only way to achieve the objective, but how could it possibly be done? After all, the Arab countries might object to any production controls placed on them. Personnel at CIA headquarters in Langley went to work eagerly searching for the solution. And so it was that a mere ten years after the Falklands seismic survey of 1981, the firefighters walked away from still-smoking oil well-heads, leaving behind them two shattered Arab oil-pro- ducing nations: Kuwait and Iraq. Not bad for a first strike. 4 r Wad @ LWld!l HIBMUMAIG Wit UIE YUMUALLUID BUIE UIUAT During late 1981 an obscure document was circulated around a —_ overnight, while hundreds of multimillion-dollar oil rigs sat quiet- small select group of Western oil multinationals. The dataitcon- ly rusting in the deserts and mountains. tained was staggering and details swiftly leaked. In a recently If evidence was ever needed proving the size (and danger) of the completed comprehensive seismic survey of the Falkland Islands —_Fajklands reserves, this was it: the nations of the Middle East continental shelf, realistic estimates indicated oil reserves more flooding world markets with crude oil from massive over-produc- than ten times larger than those in Saudi Arabia. For anyone with tion, and halving their own revenues in order to halt western the wealth to exploit the reserves, the magnitude of the prize was moves to exploit the massive South Atlantic oil fields, The size of almost beyond comprehension. the catastrophe for the western oil multinationals was barely That the seismic was accurate was proved beyond doubt by the noticed by members of the public, who responded with ill-con- mid-1980s, by which time Argentina had proven reserves of more —_cealed glee to cheaper petrol prices at the pumps. than four billion barrels on its Patagonian coast directly opposite Vast oil reserves in the South Adantic, initially merely tempt- the Falkland Islands. With the continent shelving downwards out ing, soon became a strategic imperative in the minds of the west- to sea, calculations indicated Falkland Islands reserves easily a8 erp oj} multinationals, frustrated by their continued inability to massive as those predicted in the 1981 document. raise world oil prices. Reducing Middle East production to earlier, During 1982 many Britons wondered aloud at the sheer compas- —_ much lower levels was the only way to achieve the objective, but sion of their government which sent an entire battle fleet to evict how could it possibly be done? After all, the Arab countries might the Argentines who, it was rumoured, were indecently assaulting a —_gbject to any production controls placed on them. Personnel at few hundred Falklands sheep farmers. It was democracy at its CIA headquarters in Langley went to work eagerly searching for best and countless thousands of patriotic Britons cheered the QEII the solution. as she cleared the harbour at Southampton laden with troops for And so it was that a mere ten years after the Falklands seismic the fight in the South Atlantic. survey of 1981, the firefighters walked away from still-smoking Democracy? The British government had probably forgotten _ jl well-heads, leaving behind them two shattered Arab oil-pro- the sheep farmers a generation before but it knew about the oil ducing nations: Kuwait and Iraq. Not bad for a first strike. reserves, as did the Argentines who man- aged tO obuinacpyrofihesinit. —— ———————_————————= LIBYA IS NEXT report. Those oilmen who knew of the Combined Arab output before seismic report watched the patriotic fer- . com: the Iraqi slaughter began was vour with amazement but said nothing. If ...comprehensive seismic survey of about 13.17 million barrels per the British public really wanted to believe the Falkland Islands continental day, excluding Iran. Within 40 the Thatcher Government would send a + gs . +o days both Kuwait and Iraq had battle fleet 8,000 miles to protect a few shelf, realistic estimates indicated stopped production completely, — it was not their job to disillusion oil reserves more than ten times poner 4 =, Necathigge The American and British governments larger than those in Saudi Arabia. 33% of balanced Arab oil output. were excited at the prospect of total oil 8 . The world barely noticed as self-sufficiency and the resulting ability For anyone with the wealth to Saudi Arabia took up the slack and to bypass the Middle East completely for H increased output to compensate for their energy needs. But what if the exploit the reserves, the lost Kuwaiti and Iraqi production nations of the Middle East tried to com- magnitude of the prize was almost capability. The CIA strategic pete with them? The shorter shipping . planners noticed though. What distance from the Persian Gulf to most beyond comprehension. they had done was reduce the world markets would still undermine number of Arab oil-producing prices. Clearly strategic controls had to nations by two. If they could also be placed on the Middle East first. eliminate Libya there would be The problem the British government faced was twofold: the another fall of 1.36 million barrels per day, creating a further drop Falklands were so far away that Britain alone could never hope to _in balanced Arab oil output equalling 10.3%. With all three coun- explore without the assistance of the Americans; secondly, the _ tries wiped out, the total drop would be more than 43%—nearly ready availability of Middle East crude at low prices would make _half of the total. The three other Arab producing countries consid- exploration a financial impossibility. Despite the predictions of ered to be ‘friendly’ to the US administration could be left for some analysts during 1981 that crude oil prices might rise as high treatment at a later date, as could Iran. as $80 per barrel by 1985, there was no way of telling if those pre- dictions would become reality. (By 1985 oil prices had in fact CONNING THE GREENIES — slumped dramatically to $10 per barrel, well below the $28 mini- The masses of environmental scientists who swarmed to the mum needed for Falklands exploration.) Gulf to examine the carnage were skillfully shown slick damage in Proof the Arab nations had ‘noticed’ the Falklands survey was ‘Gulf, mines on the beach at Kuwait, smoke in the sky and provided in 1982 when OPEC suddenly kicked the bottom out of Some low pressure blowouts in the Burgan field. None, including the price of crude oil. For nearly ten years following the famous Greenpeace, was allowed to ‘stray’ into the real problem areas to Nei tial F ei A -. the north of Kuwait city, or the areas of southern Iraq subjected to price-hike of 1973, western oil multinationals had been using their 4 . ‘ 7 windfall revenue to build many more oil rigs to drill more and carpet-bombing by American B52 heavy bombers from Diego more wells, So frantic was the activity that the total number of Garcia in the Indian Ocean, rigs drilling under western multinational control rose from around Blowout pressures in the north were up to ten times as high as 1,500 in 1973, to just over 4,600 by late 1981. those in Burgan field—a very good reason for keeping unwanted . 4 ms , . John McMahone's old company, Bechtel, subtly Disaster swiftly followed the 1982 oil price collapse with more 2 ' : than 3,000 western drilling rigs suddenly idle due to a lack of — ‘ifected the flow of traffic away from the ‘dangerous’ areas, Huge funds. In other words, the number of active drilling rigs went into (Continuedion'parel72 CONNING THE GREENIES The masses of environmental scientists who swarmed to the Gulf to examine the carnage were skillfully shown slick damage in the Gulf, mines on the beach at Kuwait, smoke in the sky and some low pressure blowouts in the Burgan field. None, including Greenpeace, was allowed to 'stray' into the real problem areas to the north of Kuwait city, or the areas of southern Iraq subjected to carpet-bombing by American B52 heavy bombers from Diego Garcia in the Indian Ocean. Blowout pressures in the north were up to ten times as high as those in Burgan field—a very good reason for keeping unwanted spectators away. John McMahone's old company, Bechtel, subtly directed the flow of traffic away from the ‘dangerous’ areas. Huge NEXUS¢15 probably yet to come in the Falklands. OIL DISCOVERED UNDER THE FALKLANDS Continued on page 72 DECEMBER 1993 - JANUARY 1994