Crude Dudes

From his corner office in the heart of New York's financial district, Fadel Gheit keeps close tabs on what goes on inside the boardrooms of the big oil companies. An oil analyst at the prestigious Wall Street firm Oppenheimer & Co., the fit, distinguished-looking Gheit has been watching the oil industry closely for more than 25 years.

Selling the modern world's most indispensable commodity has never been a bad business to be in — particularly for the small group of companies that straddle the top of this privileged world. But never more so than now. "Profit-wise, things could not have been better," says Gheit, "In the last three years, they died and went to heaven .... They are all sitting on the largest piles of cash in their history."

But to stay rich they have to keep finding new reserves, and that's getting tougher. Increasingly it means cutting through permafrost or drilling deep underwater, at tremendous cost. "The cheap oil has already been found and developed and produced and consumed," says Gheit. "The low-hanging fruit has already been picked."

Well, not all the low-hanging fruit has been picked.

Nestled into the heart of the area of heaviest oil concentration in the world is Iraq, overflowing with low-hanging fruit. No permafrost, no deep water. Just giant pools of oil, right beneath the warm ground. This is fruit sagging so low, as it were, that it practically touches the ground under the weight of its ripeness.

Not only does Iraq have vast quantities of easily accessible oil, but its oil is almost untouched. "Think of Iraq as virgin territory .... This is bigger than anything Exxon is involved in currently .... It is the superstar of the future," says Gheit, "That's why Iraq becomes the most sought-after real estate on the face of the earth."

Gheit just smiles at the notion that oil wasn't a factor in the U.S. invasion of Iraq. He compares Iraq to Russia, which also has large undeveloped oil reserves. But Russia has nuclear weapons. "We can't just go over and ... occupy (Russian) oil fields," says Gheit. "It's a different ballgame." Iraq, however, was defenceless, utterly lacking, ironically, in weapons of mass destruction. And its location, nestled in between Saudi Arabia and Iran, made it an ideal place for an ongoing military presence, from which the U.S. would be able to control the entire Gulf region. Gheit smiles again: "Think of Iraq as a military base with a very large oil reserve underneath .... You can't ask for better than that."

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