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Context of 'January 2005: Oil Lobby Report Given to Iraqi Finance Minister'

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June 2004: New Iraqi Oil Minister Appointed

Thamir al-Ghadban is appointed as Iraq’s minister of oil. Al-Ghadban is a British-trained petroleum engineer and former senior adviser to Ibrahim Bahr al-Uloum, Iraq’s previous oil minister under the US-appointed Iraqi Governing Council. [Muttitt, 2005]

Entity Tags: Thamir al-Ghadban

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

The International Tax & Investment Centre (ITIC), a corporate lobby group that advocates for pro-business investment and tax reform, issues a major report titled Petroleum and Iraq’s Future: Fiscal Options and Challenges, expressing the view that Iraq’s relationships with oil companies should be managed through the use of production sharing agreements (PSAs). The paper calls PSAs the “simplest and most attractive regulatory… framework.” It says this view is supported by “international experience and regional preferences,” though critics of PSAs will note that PSAs are not in fact popular among the major oil producing countries of the Middle East. “It is difficult to overstate how radical a departure PSAs would be from normal practice, both in Iraq and in other comparable countries of the region,” says Greg Muttitt of PLATFORM, a British oil industry watchdog group. “Iraq’s oil industry has been in public hands since 1972; prior to that the rights to develop oil in 99.5 percent of the country had also been publicly held since 1961. In Iraq’s neighbors Kuwait, Iran, and Saudi Arabia, foreign control over oil development is ruled out by constitution or by national law. These countries together with Iraq are the world’s top four countries in terms of oil reserves, with 51 percent of the world total between them.” The ITIC report also argues that foreign investment in Iraq’s oil sector will help “kick start” Iraq’s economy and free up funds for other programs. [Muttitt, 2005]

Entity Tags: International Tax and Investment Centre

Timeline Tags: Iraq under US Occupation

Top Iraqi officials head to Washington for the second meeting of the Iraq-US Joint Economic Commission. The first meeting took place in September. At a press conference, Iraqi Finance Minister Adil Abdel Mahdi tells reporters that the new Iraqi government is implementing, or intends to implement, a number of major changes to the country’s economy. Some of the reforms he mentions would be part of a new oil law that will be “open to investment, to foreign investment downstream, maybe even upstream.” He explains that the law is being developed by a “high-ranked official from the Oil Ministry” in consultation with “his counterparts and with agencies here in the States.” Mahdi also says that Iraq will review the oil contracts that Saddam Hussein had inked with countries like France and Russia. “So I think this is very promising to the American investors and to American enterprises, certainly to oil companies,” he says. Mahdi also defends an agreement the Iraqi government recently made with the IMF to implement certain reforms, which included an end to food subsidies (see September 29, 2004). “I think this is a necessity for the Iraqi economy,” Mahdi says. “We really need to work on our subsidy side. Subsidies are taking almost 60 percent of our budget. So this is something we have to work on… Other measures really were a real necessity for the Iraqi economy before becoming conditions asked by the IMF.” But as Inter Press Service notes, Iraq’s food subsidies system “have kept millions of Iraqis from starvation under US and UK-pressed sanctions imposed by the United Nations after the 1991 Gulf War.… It is believed that many more Iraqis would have died if not for Hussein’s strong subsidies system that gave food to Iraqi families.” An issue that is apparently not discussed during the two-day meeting between US and Iraqi officials is the large amount of money that is known to have been defrauded from the CPA. In response to a reporter’s question, Mahdi says only, “No, this issue has not been discussed. We are interested to follow such issues, of course. Whatever concerns corruption or money, we are interested.” [US Department of State, 12/21/2004; Inter Press Service, 12/24/2004]

Entity Tags: Adil Abdel Mahdi

Timeline Tags: Iraq under US Occupation

At a conference with oil companies in Beirut, the British ambassador in Baghdad gives the Iraqi finance minister a report (see Autumn 2004) authored by the International Tax and Investment Centre, a Washington-based oil industry lobby. The report, which contains recommendations for a new Iraqi oil policy, expresses the view that Iraq’s relationships with oil companies should be governed through the use of production sharing agreements (PSAs). [Observer, 3/4/2007]

Timeline Tags: Iraq under US Occupation

Iraq’s new oil minister, Hussein al-Shahristani, says that Iraq will need international assistance and billions of dollars in investment to develop its oil sector. “There is need to pass an oil and gas law to guarantee the right conditions for international companies to help develop the Iraqi oil sector,” he says. [Dow Jones Newswires, 5/23/2006]

Entity Tags: Hussein al-Shahristani

Timeline Tags: Iraq under US Occupation

Robert Gates.Robert Gates. [Source: US Defense Department]In its final report, the Iraq Study Group (ISG) recommends significant changes to Iraq’s oil industry. The report’s 63rd recommendation states that the US should “assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise” and “encourage investment in Iraq’s oil sector by the international community and by international energy companies.” The recommendation also says the US should “provide technical assistance to the Iraqi government to prepare a draft oil law.” [Iraq Study Group, 2006, pp. 57 pdf file] The report makes a number of recommendations about the US occupation of Iraq, including hints that the US should consider moving towards a tactical withdrawal of forces from that beleaguered nation. President Bush’s reaction to the report is best summed up by his term for the report: a “flaming turd.” Bush’s scatological reaction does not bode well for Secretary of State Condoleezza Rice’s own hopes that the administration will use the ISG report as a template for revising its approach to Iraq. This does not happen. Instead, Vice President Dick Cheney organizes a neoconservative counter to the ISG’s recommendations, led by the American Enterprise Institute’s Frederick Kagan. Kagan and his partner, retired general Jack Keane, quickly formulate a plan to dramatically escalate the number of US troops in Iraq, an operation quickly termed “the surge” (see January 10, 2007). The only element of the ISG report that is implemented in the Bush administration’s operations in Iraq is the label “a new way forward,” a moniker appropriated for the surge of troops. Administration officials such as Rice and the new defense secretary, Robert Gates, quickly learn to swallow their objections and get behind Bush’s new, aggressive strategy; military commanders who continue to support elements of the ISG recommendations, including CENTCOM commander General John Abizaid and ground commander General George Casey, are either forced into retirement (Abizaid) or shuttled into a less directly influential position (Casey). [Salon, 1/10/2007]

Entity Tags: American Enterprise Institute, Condoleezza Rice, Frederick Kagan, Iraq Study Group, Robert M. Gates, Jack Keane, George Casey, Richard (“Dick”) Cheney, George W. Bush, John P. Abizaid

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

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