American
to Oversee Iraqi Oil Industry
By David
Teather in New York
27 April, 2003
The US is preparing to install an American chairman on a planned management
team of the Iraqi oil industry, providing further ammunition to critics
who have questioned the Bush administration's agenda in the Middle East.
The administration
is planning to structure the potentially vast Iraqi oil industry like
a US corporation, with a chairman and chief executive and a 15-strong
board of international advisers.
According to
a report in the Wall Street Journal, it has lined up the former chief
executive of the US division of Royal Dutch/Shell, Philip Carroll, to
take the job of chairman.
Large scale
decisions on investment, capital spending and production are likely
to need the approval of the advisory board, which will act like a board
of directors. The day-to-day management team will be vetted by US officials
and is likely to be made up of existing and expatriate Iraqi oil officials.
The structure
is likely to anger opponents of the administration who argue that the
US is wielding too much power in Iraq.
By involving
non-Iraqis, the US could also expose itself to the accusation that it
is attempting to take control of the industry and open the door to foreign
investment by major western oil companies - a perception the Bush administration
is keen to avoid.
The Middle East
has, since the early-to-mid-1970s, largely closed the door on foreign
oil firms - but contracts have been awarded to engineering and construction
firms such as Bechtel, which was recently handed a $600m (£380m)
commission in Iraq by the US Agency for International Development.
US and Iraqi
engineers have resumed modest oil production in the south of the country,
in fields close to Basra.
The other major
field in the north, near Kirkuk, has yet to be restarted, but is expected
to begin pumping oil in the next few days. The Basra fields produced
60% of Iraq's pre-war production of around 2.5m barrels a day.
The US is pushing
for an end to economic sanctions to allow the oil to be freely exported.
A handful of
Iraqi oil officials have been attempting to restore some order to the
country's energy infrastructure and have been meeting regularly with
the US military in Baghdad. The US has been eager to get the cooperation
of the skilled Iraqi oil administration, but an attempt to impose a
structure on the industry with outside involvement could cause friction.
The oil minister
in the ousted Saddam regime, Amer Mohammed Rasheed, is on the US's most-wanted
list.
Iraq, with 112bn
barrels of proven reserves, is second only to Saudi Arabia, and has
the potential to become a superpower in the oil industry. Experts believe
that with billions of dollars of investment in the nation's crippled
infrastructure it could produce up to 6m barrels a day within five or
six years. There are believed to be 200bn barrels of probable reserves.
The oil beginning
to pump in Iraq is being used for domestic purposes. Once exports are
up and running again, US and British officials have said the aim is
to put the proceeds into a fund to pay for the reconstruction of Iraq.
But details of the fund, including who would administer it, have been
scant.
The new management
team and part of the advisory board are expected to be named next week.
The chief executive would play a similar role to the former oil minister
and would represent Iraq at meetings of Opec, the organization of oil
exporting nations. The position of vice chairman is expected to be filled
by Fadhil Othman, who led Iraq's oil marketing group before Saddam came
to power 24 years ago.
Thamir Gadhban,
a senior oil ministry official working to restore order to the industry
in Baghdad, told the Journal that he expected the chief executive to
come from the ranks of the existing hierarchy. "The Iraqi oil industry
is not a new one, and there are experienced people in the ministry of
oil and its organizations," he said.
© Guardian
Newspapers Limited 2003