10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
204.
Oil production
fell sharply during military operations, before recovering. The
oil
sector was
severely disrupted by looting.
205.
Hard
Lessons recorded that
during and immediately after the invasion there
was
no “serious” sabotage of the northern or southern oilfields,
with only nine fires
206.
In contrast,
the effect of looting and the developing insurgency was more
severe
than the US
had expected:
“In the
south, where US troops bypassed the oil infrastructure on the way
to
Baghdad,
vandals and thieves stripped facilities of anything of value. Oil
advisers
had
identified key installations that needed to be protected, but ‘[the
military] said
they didn’t
have enough people to do that’ …”
207.
The Ministry
of Oil in Baghdad was also looted.
208.
The June 2003
Economist Intelligence Unit (EIU) Country Report for
Iraq,
citing
figures from the IEA, assessed that Iraqi crude oil output fell
from 2.5m bpd in
February to
1.4m bpd in March, and then to “a paltry” 170,000 bpd in
April.112
Following
the
cessation of major hostilities, output increased. Iraqi officials
suggested that by
early June
approximately 525,000 bpd were being produced in the north and
around
300,000 bpd
in the south of Iraq. Domestic demand was estimated to be 600,000
bpd.
209.
The Cabinet
Office advised Ministers in mid-August 2003 that oil production
had
been
severely disrupted by looters and saboteurs in the initial months
after the conflict.113
All the
major oilfields had been affected. That disruption had cost US$3bn
in lost oil
export
revenue over the 100 days following the end of the
conflict.
210.
Planning for
post-conflict Iraq continued after the beginning of military
operations.
211.
UK policy
towards post-conflict Iraq continued to be based on the
assumption
that after
a short period of US-led, UN-authorised military Occupation, the UN
would
administer
and provide a framework for the reconstruction of post-conflict
Iraq (see
Section
6.5).
212.
In the context
of negotiations with the US on what would become resolution
1483
(2003), the
UK argued that the Coalition should not have sole control over
Iraqi oil
revenues.
111
Bowen SW
Jr. Hard
Lessons: The Iraq Reconstruction Experience. U.S.
Government Printing
Office,
2009.
112
Economist
Intelligence Unit, June 2003, Country
Report for Iraq.
113
Letter
Drummond to Owen, ‘Iraq: Update for Ministers’ attaching Paper
Cabinet Office, 14 August 2003,
‘Iraq:
Update for Ministers, 14 August 2003’.
405