Why would a poor country, racked by war and needing to rebuild, NOT rely on competitive bids to get the most from its one valuable resource, oil? Answer: the State Department made sure that the country awarded no-bid contracts to the big American oil companies. This makes me want to know all the more what went on in those secret energy sessions the oil companies had with Cheney. Were the oil companies pushing for an Iraq takeover? Were they offered the Iraqi oil fields after the US took over Iraq? We won’t know for a while, but it seems likely, especially since Cheney makes his money from Halliburton.

Here’s the story, by Andrew Kramer in the NY Times. It begins:

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say.

The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism.

In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said.

It is unclear how much influence their work had on the ministry’s decisions.

The advisers — who, along with the diplomatic official, spoke on condition of anonymity — say that their involvement was only to help an understaffed Iraqi ministry with technical and legal details of the contracts and that they in no way helped choose which companies got the deals.

Repeated calls to the Oil Ministry’s press office for comment were not returned.

At a time of spiraling oil prices, the no-bid contracts, in a country with some of the world’s largest untapped fields and potential for vast profits, are a rare prize to the industry. The contracts are expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron, as well as to several smaller oil companies.

The deals have been criticized by opponents of the Iraq war, who accuse the Bush administration of working behind the scenes to ensure Western access to Iraqi oil fields even as most other oil-exporting countries have been sharply limiting the roles of international oil companies in development. …

Continue reading.

UPDATE: From Andrew Tilghman’s report on this story in TPMMuckraker:

Near the end of the story, the Times reports:

Advisers from the State, Commerce, Energy and Interior Departments are assigned to work with the Iraqi Oil Ministry, according to the senior diplomat. In addition, the United States Agency for International Development has a contract for Management Systems International, a Washington consulting firm, to advise the oil and other ministries. The agency’s program is called Tatweer, the Arabic word for development.

A Washington consulting firm? Actually, Management Systems International is a subsidiary of a massive Australian company, Coffey International Ltd. focusing on mining, oil and gas infrastructure projects.And guess who some of their clients are? Global oil companies including Cheveron, Royal Dutch Shell and BP.

So the company that touts big oil as clients is helping the Iraqi government negotiate with those companies — and getting paid by the U.S. government to do so.

But USAID and the consulting firm they hired don’t call that a conflict of interest, the call it “mentoring.”

“The legal department of the Ministry of Oil passed us a draft of the contract,” Samir Abid, a Canadian of Iraqi origin who is an employee of the Tatweer program, said in a telephone interview. “They passed it to us and asked for our comments because we were mentoring them.”