17 June 2008

Exclusive: Ex-UK Army Chief in Iraq Confirms Peak Oil Motive for War; Praises Fraudulent Reconstruction Programmes

A former senior British Army official in Iraq, James Ellery, admits the link between peak oil and the Anglo-American occupation of Iraq. Currently director of British security firm and US defence contractor, AEGIS, Ellery also whitewashes the massive corruption in Iraqi reconstruction projects.

Brigadier-General James Ellery CBE, the Foreign Office’s Senior Adviser to the Coalition Provisional Authority in Baghdad since 2003, confirmed the critical role of Iraqi oil reserves in potentially alleviating a “world shortage” of conventional oil. The Iraq War has helped to head off what Brigadier Ellery described as “the tide of Easternisation” – a shift in global political and economic power toward China and India, to whom goes “two thirds of the Middle East’s oil.”

After the 2004 transfer of authority to an interim Iraqi civilian administration, Brigadier Ellery set up and ran the 700-strong security framework operation in support of the US-funded Reconstruction of Iraq. His remarks were made as part of a presentation at the School of Oriental & African Studies (SOAS), University of London, sponsored by the Iraqi Youth Foundation, on 22nd April.

World Oil Shortage

“The reason that oil reached $117 a barrel last week”, he said, “was less to do with security of supply… than World shortage.” He went on to emphasise the strategic significance of Iraqi petroleum fields in relation to the danger of production peaks being breached in major oil reserves around the world. “Russia’s production has peaked at 10 million barrels per day; Africa has proved slow to yield affordable extra supplies – from Sudan and Angola for example. Thus the only near-term potential increase will be from Iraq,” he said. Whether Iraq began “favouring East or West” could therefore be “de-stabilizing” not only “within the region but to nations far beyond which have an interest.”

Last month geological surveys and seismic data compiled by several international oil companies exploring Iraqi oil reserves showed that Iraq has the world’s largest proven oil reserves, with as much as 350 billion barrels, significantly exceeding Saudi Arabia’s 264 billion barrels, according to a report in the London Times. Former Bush administration energy adviser Matthew Simmons, author of the book Twilight in the Desert, says that Saudi oil production has probably already peaked, with production rates declining consecutively each year. This month the UK Treasury Department warned of the danger of an oil supply crunch by 2015, due to rocketing demand from China and India.

The Threat of Easternisation

Brigadier Ellery’s career in the British Army has involved stints in the Middle East, Africa, Bosnia, Germany and Northern Ireland. “Iraq holds the key to stability in the region,” he said, “unless that is you believe the tide of ‘Easternisation’ is such that the USA and the West are in such decline, relative to the emerging China and India, that it is the East – not the West – which is more likely to guarantee stability. Incidentally, I do not.” Iraq’s pivotal importance in the Middle East, he explained, is because of its “relatively large, consuming population” at 24 million, its being home to “the second largest reserve of oil – under exploited”, and finally its geostrategic location “on the routes between Asia, Europe, Arabia and North Africa - hence the Silk Road.”

Oil production peaks when a given petroleum reserve is depleted by half, after which oil is geophysically increasingly difficult to extract, causing production to plateau, and then steadily decline. US oil production peaked by 1970, while British production in the North Sea peaked by 2000, converting both countries from exporters into net importers of oil and gas.

Oil industry experts and petroleum geologists increasingly believe that world oil production is precariously close to peaking. According to an October 2007 report by the German-based Energy Watch Group, run by an international network of European politicians and scientists, world oil production peaked in 2006. According to BP’s annual statistical review of world energy supply and demand for 2008, released on 11th June, world oil production fell last year for the first time since 2002, by 130,000 barrels per day last year to 81.53 million. Yet world consumption continued to rise by 1.1 per cent to 85.22 million barrels per day, outweighing production by nearly 5 per cent.

Iraqi Reconstruction Corruption Whitewash

Brigadier-General James Ellery is currently Director of Operations at AEGIS Defence Services Ltd., a private British security firm and US defence contractor since June 2004. In April this year, the same month as Ellery’s SOAS lecture, AEGIS won the renewal of its US defence department (DoD) contract for two more years, which at $475 million is the single largest security contract brokered by the DoD. The contract is to provide security services for reconstruction projects in Iraq conducted by mostly American companies.

A US government audit by the Office of the Special Inspector General for Iraq Reconstruction, released exactly two years before Brigadier Ellery’s SOAS presentation, concluded that AEGIS could not prove it had properly trained or vetted several armed Iraqi employees. For a random sample of 20 armed guards, no training documentation was found for 14 of them. For 125 other employees, AEGIS reportedly failed to document background checks. The auditors concluded that “there is no assurance that Aegis is providing the best possible safety and security for government and reconstruction contractor personnel and facilities.”

During his April presentation at SOAS, AEGIS director Ellery declared, “Iraq promises a degree of prosperity in the region as it embarks on massive Iraqi-funded reconstruction, a part of which will raise Iraqi’s oil production from 2.5 million bpd today to 3 million by next year and maybe ultimately 6 million barrels per day.” He added, “With a budget of $187 billion over 4 years, Iraq is poised to have a considerable impact on the economies of countries whose technologies can fill the skills gap left by the latter years of Saddam Hussein’s regime.”

During the UN sanctions regime imposed primarily by the US and Britain, Iraq was banned from importing thousands of household goods, including food, medicines, clothes and books, from 1991 to 2003, purportedly to prevent Saddam from developing weapons of mass destruction. It is now widely recognized that the sanctions led to massive socio-economic deprivation, the break-down of civilian infrastructure, large-scale unemployment, and de-industrialisation, resulting in the deaths of up to 1.8 million Iraqis, half of whom were children. The humanitarian crisis led United Nations officials such as Dennis Halliday, former UN Assistant Secretary-General, and Hans von Sponeck, former Humanitarian Coordinator in Iraq, to resign in protest.

Today, those profiting most from reconstruction projects in Iraq are not Iraqis, but private contractors based primarily in the United States and Britain, according to a new report out last month by Stuart Bowen Jr, incumbent Special Inspector General for Iraq Reconstruction. The Bowen Report found that at least 855 contracts valued at billions of dollars were cancelled before completion. Another 112 agreements were cancelled because of poor performance, while still more projects recorded as completed never happened. In one case, a $50 million children’s hospital in Basra is listed as completed although the contract was stopped when only 35 percent of the work was finished.

During Brigadier Ellery’s tenure at the Coalition Provisional Authority (CPA) in Baghdad, under Paul Bremer’s leadership $8.8 billion of reconstruction funds were unaccounted for, and a further $3.4 billion was re-directed for “security” purposes. A UN body to audit the Development Fund for Iraq (DFI), by which the CPA Programme Review Board managed Iraqi oil revenues until June 2004, found “gross irregularities by CPA officials in their management of the DFI,” and condemned the United States for “lack of transparency” and providing the opportunity for “fraudulent acts.”

Under American- and British-administered Iraqi reconstruction programmes, Iraqi agriculture has been devastated. In 2004, the Coalition Provision Authority imposed a hundred economic orders designed to open Iraq’s economy to foreign investment, including Order 12 for tax- and tariff-free imports of foreign products. The Order allowed the giant American agribusiness conglomerate Cargill to flood Iraq with hundreds of thousands of tonnes of cheap wheat, undercutting local food prices, and wiping out the livelihoods of Iraqi farmers.

As an executive director of AEGIS, one of the most prominent US defence contractors in Iraq, Brigadier Ellery is a personal beneficiary of the privatisation of the Iraqi economy. In the conclusions of his April address, he said, “Iraq has resources aplenty: not just oil, of which there is a prodigious quantity”, but especially “the capacity to rebuild a balanced economy including agriculture - for which Iraq was a legend.”


  1. Hi,
    You have forgotten to mention the oxford/cambridge "qui bono" reasoning of AEGIS

    In one article Aegis employer claimed "we help the Iraki orphanes/orphanage
    we gave 2% to the Iraki orphans

    he did not clarify if that was referring to the insane killing by trigger happy mercenaries of their parents/Irakies HENCE orphange

  2. Wednesday June 18, 2008.

    The readers of this article by the distinguished UK scholar, and my favorite young 911 detective, Nafeez Ahmed, might also be interested in watching this hour long video speech by Lindsey Williams to further adjudicate upon the veracity of Brigadier-General James Ellery's narratives:


    or reading Lindsey's book which is out of print but fortunately made available online:

    The story is far more convoluted than either "Peak" or "reconstruction fraud" mantras. Surely Mr. Nafeez Ahmed would already know it. But for the rest of the readers, there is as much shortage of oil in the world as there is "global warming" on the planet due to man-made effects (as opposed to natural effects being the higher impacting coefficient), and both are in even far greater excess than WMDs in Iraq.

    The point to appreciate is really the infamous “Technique of Infamy” – and the erstwhile Brigadier-General James Ellery's narrative is merely another example of this sophisticated Machiavelli - an advanced postgraduate level course beyond 101, 201, ... 911 – in action replay.

    Why employ it?

    To continue creating “Revolutionary Times”

    For what purpose?

    “What is inconceivable in normal times is possible in revolutionary times”!

    And what might that “revolutionary times” be for?

    Does one really want to know? Ignorance is a far better bliss! Better not know. In any case, curiosity killed the cat, remember?

    And even if I humbly tell, one wouldn't believe it!

    Still wanna know? Okay - but here is the last chance to fast forward!

    The construction of a world's supra-government by making all nation-states go systematically bankrupt and entirely beholden to a handful of ruling elite before which the world already bows today, but will bow even lower tomorrow as independent and sovereign nation-states are devilishly obsoleted in favor of territorial management and 'global farming and harvesting' under “one centre of authority, one centre of force, one centre of decision-making. It is world in which there is one master, one sovereign”!

    Who is that Sovereign? And who said that? George W. Bush? The Americans? The Europeans? The Jews? The Zionists? The Israelis? The Haliburtons? The Chevrons? Henry Kissinger? Putin?

    Has one ever heard of the Bank for International Settlements (bis.org)?

    The only bank I know whose website is an “org”?

    How much does one know of the previous empire from which the United States had, with many sacrifices of a handful, broken away by throwing that darn tea overboard?

    Who had run and controlled and financed that empire upon which the sun once never set, while maintaining the front faces of royalty? http://www.reformation.org/bank-of-england.html

    It is for nothing that all sacred texts of wisdom on the planet in almost all civilizations remind their flock - that those who don't learn from their history are condemned to repeat it.

    And the only thing every flock has always learned from history - that they don't not only not learn anything from history, but that they mostly always remain ignorant of it.

    The modernity du jour is the worst example of this 'learning', perhaps even in the entire history of civilizations - kept eternally busy chasing their “American Dreams” or the bare struggles to put the food on the table in every country and every culture, who has the time!

    Thus welcome to the New World Order - one day, one revolutionary time, one technique of infamy, at a time!

    I am sorry that we sheeples and sheeplets are busy bequeathing even worse times to our progeny who will surely thank us in spades!

    Zahir Ebrahim
    Project Humanbeingsfirst.org

    Comment first posted to:

    And reproduced here just fyi.

  3. Nafeez,

    I am no oil expert but I would question the credibility of the 350 Gb figure for Iraq's proven oil reserves (announced last month by the Iraqi governement).

    Those experts who predict an early global peak seriously doubt the official Saudi reserves of 264 Gb (as there is good reason to think that these numbers have been deliberately inflated in a bid for higher OPEC quotas or for other political purposes). Some say that a realistic estimate could be in the 100 Gb range or lower (www.theoildrum.com/node/4153?nocomments).

    Compared to this, these latest Iraqi claims look rather outlandish. I would also ask them just how they carried out all this wonderful exploration while large parts of Iraq were no-go areas for the central government or foreigners.

    Would not be the first lie about this country in the last few years.


  4. Nafeez,

    How do you respond to Ismael Hossein-Zadeh

    Is There an Oil Shortage?

  5. re Peter's comments of June 20, 2008:

    Yes I agree. Keep in mind that oil reserves are a state secret in most producing nations - we simply don't know how much oil they have and can profitably extract and sell. Most reports including one's like BP's annual global guestimates are all based on taking the statements of the likes of Saudi Aramco and OPEC at face-value.

    I predict that we'll see a substantial drop in the proven Iraqi reserves in time.


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