Story of IPC

By 1958 when Abdel Karim Qasim seized power in Iraq and declared it a republic, IPC had chosen to develop only 0.5% of the proven reserves (fearing that more production of oil would depress returns on its investments elsewhere). At that time Qasim had demanded that the IPC give up 60 per cent of its concession area, double output from existing installations and double refining capacity, the IPC responded by reducing output. The oil giants had decided to make an example of Iraq, to prevent any other oil producing country from showing backbone. Qasim responded to the oil giants’ intransigence by withdrawing from the Baghdad Pact, withdrawing from the sterling bloc, signing an economic and technical aid deal with the Soviet Union in 1959, ordering British forces out of Habbaniya base, and cancelling the American aid programme. In 1961 he wound up negotiations with the IPC and issued Law 80, under which the IPC
could continue to exploit its existing installations, but the remaining territory (99.5 per cent) would revert to the government. The oil giants responded by further suppressing IPC production. In turn, Qasim in 1963 announced the formation of a new state oil company to develop the non-concession lands, and revealed an American note threatening Iraq with sanctions unless he changed his position. He was overthrown four days later in a coup that the Paris weekly L’Express stated flatly was “inspired by the CIA”. (Tanzer, p.52)
According to Tanzer, the total investment made by the oil companies in Iraq was less than $50 million-after this they received profits sufficient to finance all future investment; whereas Stork calculates their profits from Iraq at $322.9 million in 1963 alone. – Michael Tanzer, The Energy Crisis, World Struggle for Power and Wealth, 1974, p. 59; Stork, p. 119.)
Subsequent events paved way for rise of Ba’athist party and nationalisation of IPC.

US dependence on Oil

The US with 4.5% of the world’s population, uses 26% of the world’s oil. In 2001, the US imported 54% of the oil it needed, importing 11-12 million barrels a day and producing about 8-9 million a day to provide the 20 million barrels a day the US consumes daily. Of those imports, 48% came from the Western Hemisphere and 30% came from the Persian Gulf region, with the rest coming from Africa and Europe.
[Source: Energy Information Administration - 5/02]
Although the U.S. imports only 11.4 % of its oil from the Persian Gulf region, that area contains 590 billion barrels of known reserves. Add Iran, Libya and Algeria and you have another 130 billion barrels. The enormous pool of oil stretching form Algeria to Iran is estimated at 720 billion barrels. The reserves expected from the Caspian Sea in Central Asia will be added to this total in a few years.
(Source - American Petroleum Institute, 2003)