23 October 2002
International oil companies interested in securing footing in a post-war Iraq have few clues on where to start. The Bush administration is forging ahead with war plans, but US State Dept. attempts to organize an energy working group for exiled Iraqi opposition members are in disarray as divisions among the opposition groups persist.
“A number of oil companies have been querying about the possible political outcome of a war on Iraq,” says one US diplomat. At the moment, however, “we are mostly concerned with building an international alliance,” the diplomat said.
An earlier State Dept. plan to host a group of Iraqi opposition members this month to prepare development plans for Iraq’s oil and gas sector, to be presented to any interim government after the fall of Saddam Hussein, has yet to see the light of day.
Iraqi opposition groups in exile are divided over the approach to Iraq’s future oil production or the fate of contracts already signed by the government with Russian and Chinese oil companies. Their differences over an oil strategy mirror their political differences and center around the degree of US involvement each sees in Iraq’s internal affairs post-Saddam.
Among ideas that emerged recently in the circles of Iraqi exiles is to set up a “supreme committee” to manage the Iraqi oil and gas sector for an interim period. Supporters of such a plan expect the United Nations-controlled oil-for-food program, which governs Iraq’s oil exports, to be maintained in the initial phase to ensure that Iraqi oil exports continue to flow until a new system is established.
Those arguing for a political federation between the Kurdish groups in the north, the Shia majority in the south, and the Sunnis, favor full transfer of oil sector decision making to the Iraqis, with oil proceeds channeled to develop the northern and southern regions that have so far been ignored by the Iraqi regime.
Another idea emerging from opposition circles is to set up an international consortium that includes international oil companies working side by side with leaders of opposition groups to agree on the overhaul of the Iraqi energy sector.
Pushed by journalists for a public position on the oil issue, Sharif Ali bin al-Hussein, a spokesman for the Iraqi National Congress (INC), one of the main opposition groups in exile, was quoted as saying that his group favors the re-evaluation of Iraqi relations with oil companies and a review of all contracts signed by Saddam Hussein’s government.
“Iraq lacks a long-term rational, pragmatic oil policy. We would be looking for a dynamic program over the next 10 years,” he said.
However, none of the exiled groups has put forth a comprehensive proposal for the future of Iraq’s oil wealth.
Western oil companies are reluctant to open direct channels with the Iraqi opposition until the fate of Iraq — the country and the current regime — is clearer.
“If one hasn’t already established contacts within Iraq, it’s too late to start now,” one European industry source says. In any case, European oil companies won’t be first in the race; US companies would be privileged in any post-war scenario, he adds.
“The best thing to do is just to wait and take a chance when we see one” in post-war Iraq, the source said.
Ruba Husari, London
(Published in International Oil Daily, 23 October 2002)