The United States is preparing to install a US chairman on a planned management team for 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, a chief executive and a 15-strong board of international advisers.
A Wall Street Journal report said Philip Carroll, former chief executive of the US division of Royal Dutch/Shell, was lined up as 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 trying to take control of the industry and open the door to 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 $600-million commission in Iraq by the US Agency for International Development.
US and Iraqi engineers have resumed modest oil production in the south, in fields close to Basra. The other major field in the north, near Kirkuk, is expected to begin pumping in the next few days. The Basra fields produced 60% of Iraq’s pre-war production of 2,5-million barrels a day.
The US is pushing for an end to economic sanctions so the oil can be exported freely. A handful of Iraqi oil officials has been trying to restore order to Iraq’s energy infrastructure and has been meeting with the US military in Baghdad. The US is eager to get cooperation from the skilled Iraqi oil administration, but an attempt to impose a structure with outside involvement could cause friction.
The oil minister during the Saddam regime, Amer Mohammed Rasheed, is on the US’s most-wanted list.
Iraq, with 112-billion barrels of proven reserves and an estimated 200-billion barrels of probable reserves, is second only to Saudi Arabia, and could become an oil superpower. Experts believe billions of dollars of investment in Iraq’s crippled infrastructure could see it produce up to six million barrels a day within six years.
The oil beginning to pump in Iraq is being used for domestic purposes. Once exports are up and running, 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 organisation of oil exporting nations. The vice-chairman is expected to be 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 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 Oil Ministry and its organisations,” he said. — Â