U.S. Tells Iraq Oil Ministers Not to Act Without Its Approval. But first some background:
The brain center of Iraqi oil exports, a sprawling state organization that controlled the shipments from the Persian Gulf to the Turkish port of Ceyhan on the Mediterranean Sea, is dark and quiet.
Wind gusts through gaping glassless windows of the second-floor shipping room of the agency, the State Oil Marketing Organization, known by its acronym, SOMO. Just last month hundreds of workers had bustled around here.
But after American troops landed in Baghdad, looters used rolling office chairs like wheelbarrows to roll away computers and furniture. All the records, going back to 1971, have been burned.
"No one tried to stop it," said Abdul Jalil Hammadi, who was in charge of crude oil sales at SOMO. Since the looting, "Americans have not contacted us; the ministry has not contacted us."
About two miles away, though, the Oil Ministry, nine stories of glass and sand-colored concrete, stands as if new. It was virtually the only government building to emerge from the war unscathed and was heavily guarded by American troops. That fact evokes a hollow laugh among Iraqis, who suspect that America was only after oil when it invaded.
The two buildings offer a clue to the future shape of this country's vast but rudderless oil industry. The once-powerful SOMO was the backbone of the oil export system. For decades it served as the point of contact for oil traders, as well as for the United Nations, which oversaw trading under the terms of economic sanctions it imposed after Iraq invaded Kuwait in 1990. But now SOMO appears to be obsolete.
The Bush administration contends that the United Nations sales mechanism is no longer needed, as Saddam Hussein no longer runs the country.
The new heart of the oil industry is the ministry, where, heavily guarded by American troops, a small coterie of Iraqi technocrats awaits a council of Americans handpicked by the Bush administration and Iraqi exiles, that is to arrive this week. The decisions that are made affecting Iraq's oil industry over the next months will be important because they will determine who will get control of Iraq's rich oil fields.
"People are waiting to see what new policy is coming," said Kahtan al-Anbaki, former director of a giant oil refinery in northern Iraq and now ad-hoc coordinator of the ministry. As for who will be making the policy, he added, "I would not like to comment on this."
It is unclear exactly what role the council will have. The administration is believed to have offered posts to Philip J. Carroll, the former chief executive of the Shell Oil Company, the American unit of Royal Dutch/Shell, as well as to several Iraqis in exile. Mr. Anbaki said he had not been officially briefed on the composition of the new team. He said a deputy minister, a former leader of a technical college in Baghdad, Mazan Muhammad Ali-Juma, had also joined the team.
There is no open hostility to the prospect of an American-led council, but resentment of exiles — who lived safely away from the repression of Mr. Hussein's government — runs deep among ordinary Iraqis. Mr. Anbaki was vague about whether foreign companies are needed to revive Iraq's oil industry. Concerns linger about how much local people will control.
Oil industry experts praise the rank and file of Iraq's oil industry as very capable, highly experienced technocrats and specialists. Many in top management were schooled abroad in Russia and Britain. Traders and international department directors speak English.
Even so, Iraq has been encumbered by the economic sanctions for a decade. Few have the experience of having dealt in the aggressively free-market world of oil, which even governments with monopolies, like Saudi Arabia, have learned to navigate. ...
New York Times, "Iraqis Anxiously Await Decisions About the Oil Industry" by Sabrina Tavernise, April 28, 2003
And more recently:
An American official met today with Iraq's two most senior deputy oil ministers for the first time and warned them not to make any changes in their hierarchy without the approval of the allied forces in control of the country.
The meeting between Gary Vogler, an officer on the coalition forces' reconstruction team, and the Iraqi deputy ministers, Mazen Muhammad Ali Jumaa and Hussain Suliman al-Hadithy, occurred in the still-darkened halls of the Iraqi Oil Ministry — one of the very few government buildings to have survived the looting of Baghdad intact — and came as American planners continue to assemble a team that will oversee the reconstruction of Iraq's vast but worn oil industry.
Iraqis expected to take a leading role are Thamer al-Ghadhban, who most recently worked as the ministry's director for planning, as well as an expatriate, Hashem al-Kharasan, former general director of the northern part of Iraq's state-owned oil company. Reached by telephone today in Tunisia, the American-educated Mr. Kharasan declined to comment on whether he had been offered the leading role in Iraq's oil future.
In an interview, Mr. Ghadhban, who was educated in part in England and speaks fluent English, laid out his views on the oil industry, where the key question is whether it will remain in state hands, as under Saddam Hussein, or be privatized. Mr. Ghadhban said the path of privatization would not be alien to Iraq, where the ministry last year had planned to sell off small parts of the industry, like filling stations.
Still, he cautioned against moving too quickly. The laws on the books, written during the nationalization of the oil industry in the early 1970's, still require oil to be owned by the state, he said. The law would have to be rewritten by a new government before any type of privatization could begin.
"We are not against cooperating with the Americans — they are the only recognized power here now," he said, in his office stripped of phones by looters. Still, "we have intellectual people in Iraq and very nationalist people," he continued, adding: "The oil issue is not simple. It has to be carefully handled."
Particularly sensitive is the issue of expatriate Iraqis who will be central to the American team. Resentment runs deep among local Iraqis, who say they endured Mr. Hussein's rule, while exiles were safely offering criticism. "Many people stayed in Iraq," Mr. Jumaa said. "Most Iraqi people think those people deserve to take the positions. They suffered more than the others. We were under pressure. It doesn't mean because we stayed we were within the top regime and now should be second-class citizens. For myself, I wouldn't accept this fact."
Mr. Vogler shifted uncomfortably in his seat, and added, "That's human nature." One exile likely to be more palatable to Iraqis is Mr. Kharasan. General director of Iraq's vast Northern Oil Company for years, he was known as an efficient and fair manager who was well liked by his staff, said a former colleague, Amir Allous.
"He's a good manager and a leader," said Mr. Allous, who worked with Mr. Kharasan in the northern oil field. Mr. Kharasan smoked cigars, liked to play golf and was married to a Briton. ...
Mr. Jumaa said the country's refineries were now working at about 30 percent capacity. Oil has yet to start pumping in the large northern fields, but gas flows that power electricity plants have resumed, he said.
American officials will meet with the heads of all parts of Iraq's state-owned oil sector in two or three days, Mr. Vogler said. The Bush administration's choice to head the oil team — widely believed to be Philip J. Carroll, the former chief executive of the Shell Oil Company in the United States — is not expected in Iraq for at least several more days, he said.
New York Times, "U.S. Tells Iraq Oil Ministers Not to Act Without Its O.K." by Sabrina Tavernise, April 30, 2003
Who is in charge at the Oil Ministry will be of the highest importance. As is made explicit in the article, the issue of privatization will be key. The U.S. will only place people in the Oil Ministry who will support the denationalization and privatization of Iraq's vast oil reserves for American and British oil firms. Only in this way can the American government and through it American corporatists both profit extensively from those reserves and control production so as to ensure control over rival economies. Phillip J. Carroll, former CEO of Shell Oil Company, an American corporation, will be brought in to help accomplish these ends. And, of course, it will require a compliant Iraqi "provisional government" hand-selected by the U.S. to pass the laws necessary to recognize the privatization of and disassociation of the state from oil.
