1 May 2003
US plans to set up an advisory board to oversee Iraq’s oil sector are taking shape.
Fadhil Othman, a retired Iraqi oil marketing official now living in Turkey, is understood to have accepted Washington’s request that he serve as deputy head of the oil advisory board, a non-executive body.
In view of Othman’s past experience as head of Iraq’s State Oil Marketing Organization (Somo), he “could be playing a role in overseeing Somo’s future activities,” a source familiar with the US advisory board efforts told International Oil Daily.
Rebuilding Somo would be no easy task, however, judging from the extensive damage to Somo’s offices, seen in a tour of the building Wednesday. US forces have protected the Iraqi oil ministry, with US officers also establishing contacts there, but Somo’s facilities have been largely ignored so far.
US efforts to put the advisory board in place have taken longer than expected. Former Shell Oil Co. Chief Executive Philip Carroll will chair the committee. But several former Iraqi officials in exile have turned down US offers to return to Iraq and help Washington oversee the sector.
The board’s first meeting is understood to have been scheduled tentatively for May 6; the venue has not yet been disclosed. The group is expected to meet once a month, with a formal mandate only to offer advice — although observers predict that, given their experience, some participants will play a more hands-on role.
Earlier reports indicated that Washington wanted to set up a 12-member committee comprising six Iraqis and six non-Iraqi oil professionals to oversee the reconstruction phase in Iraq’s sector. Others invited to join the board include former Somo chief and deputy secretary-general of Opec, Ramzi Salman. However, he is understood to have declined the offer, saying he was happy with his current job of adviser to the Qatari energy ministry.
Gary Vogler, senior oil adviser to the Pentagon’s Office of Reconstruction and Humanitarian Assistance (ORHA), declined to comment on the role Carroll or his oil advisory panel will play in the management of the Iraqi oil ministry or its companies. “I cannot address that. It’s not in my lane and nothing official has been said about it,” Vogler told journalists after his first visit to the Iraqi oil ministry Tuesday.
ORHA chief, Ret. Gen. Jay Garner, has said that exiles called upon to assist in reconstruction will play an advisory role in the ministries for periods varying between 30 and 90 days “to share their experiences in the technical fields with the people who are part of the ministries.”
Vogler made his second visit to the oil ministry on Wednesday, coordinating operations and communications ahead of a Saturday meeting with all 22 directors-general of the ministry’s departments and companies.
But US officials have not yet arrived at Somo’s separate offices, Somo Deputy Director General Ali Rajab Hassan told International Oil Daily Wednesday.
Somo — once the most protected and secretive of governmental buildings, given the organization’s role as the major revenue provider for Saddam Hussein’s regime — is now open again to visitors. But the building has been robbed of everything except a few files, and its departments torched.
Somo — or what is left of it — is now awaiting instructions on its fate from the new occupying authority. None has come so far.
Somo officials on Wednesday said they were still trying to come to terms with the destruction of their offices, three weeks after chaos took over Baghdad as the Baath government collapsed and US forces occupied the city.
Resuming exports is out of question for now as legal and political hurdles remain to be sorted before Iraqi crude could return to international oil markets. Somo officials said they don’t have the slightest idea how or on what basis exports will resume, or who will be issuing loading orders to terminals.
For now, even phone connections with the oil ministry headquarters are non-existent, let alone with international oil companies in the outside world.
In the first-floor shipping department — which housed officials who oversaw crude loadings at the two export outlets of Ceyhan in Turkey and Mina al-Bakr on the Mideast Gulf — looters took furniture, computers, and wall-hangings before setting the offices on fire. On the floor, half-burnt, lay a 1987 diary noting appointments with several officials, including former Somo head Salman.
On the second floor, the products department and the technical studies division that supervised crude quality were also reduced to charred rubble. All documents and files relating to product exports to Jordan and elsewhere have been destroyed. “I don’t think Iraqis can do that. This is an intentional act to erase history,” Abdul Jalil Hammadi, who took over as head of the department in February, told International Oil Daily during a tour of the premises.
Escaping the fire were files and documents of the so-called first and second crude oil departments, which until March dealt with international buyers.
The first crude department was in charge of government-to-government relations — which essentially meant the former Soviet Union, but more recently focused on companies from Russia and the former Soviet republics, as well as India and Pakistan. The second crude department was in charge of relations with European oil companies, as well as those from Asia, including China and Japan. Companies from African and Arab countries were split between the two departments.
Piled on one table, probably too heavy for looters to carry downstairs, are files containing daily reports of crude exports, pricing, contracts, and lifting. The looters apparently had no interest in the most sensitive information on how Iraq’s wealth was sold to the outside world.
“We will eventually find out who did this,” said Somo deputy Hassan, who also serves as Iraq’s Opec governor and head of Somo’s energy studies department, and who until February headed the second crude oil department. He echoed other officials’ suspicions that non-Iraqi Arabs had a hand in the unnecessary looting and torching of public buildings.
Hassan’s filing cabinet is empty except for labels indicating now-absent files on minutes from meetings of the Opec governors’ board and Opec ministerial conferences. The walls of his office are bare, with electric and telephone wires pulled out and sockets missing.
“Some of the departments can be repaired but not charcoaled ones,” Hassan said, surveying other offices, including the finance department, where files containing copies of export-related invoices and commercial documents that were sent to the United Nations and the New York branch of BNP Paribas, home to Iraq’s escrow account. The thick files, which have been tampered with but not destroyed, contain details of bills of lading at Ceyhan and Mina al-Bakr, certificates of quantity and quality, cargo manifests, certificates of origin, and ullage reports sent from the ports.
Situated 1 kilometer from the oil ministry’s imposing building, Somo officials said they could not explain how or why their company was not also secured and protected by the US military in the first days of the occupation.
An armed Iraqi volunteer now guards what is left of the Somo building.
“What we are doing are essentially personal initiatives, including coordinating with the deputy ministers,” said Hassan, sitting among a handful of Somo’s 150 employees who had gathered in what used to be a cafeteria but which now serves as a meeting room with chairs borrowed from the oil ministry.
Until the breakout of war in March, Somo reported directly to the oil minister and its head was usually appointed by presidential decree.
Since the disappearance and subsequent detention this week of former Oil Minister Amer Rashid who, according to ministry officials remained at his desk until Apr. 9, two of his three deputies remain.
A third deputy, Saddam Hassan al-Ziben, a relative of former Iraqi President Saddam Hussein who headed Somo for several years, has not shown up at the ministry. It’s unlikely that he will, ministry officials say.
By Ruba Husari, Baghdad
(Published in International Oil Daily May 1, 2003)