The Report of the Iraq Inquiry

295. The AHMGIR agreed that the DTI should encourage UK oil companies to “develop

strategies towards the Iraqi oil sector and otherwise help the UK take advantage of oil

opportunities”.156

296. A week later, Ministers were informed that the DTI planned a series of meetings

with the major oil companies, “to begin to discuss more general Iraq oil issues

discreetly”.157

297. Oil production was estimated at between 400,000 and 500,000 bpd; the target was

to reach between 2.5m and 2.8m bpd (described as the pre-conflict level) by the end

of 2003.

298. From early June 2003, and throughout the summer, there were signs that security

in both Baghdad and the South was deteriorating (see Section 9.2).

299. A paper on the management of the DFI was submitted to the 5 June meeting of the

AHMGIR (chaired by Mr Straw).158

300. The paper stated that while resolution 1483 made the UK jointly responsible (with

the US) for disbursements from the DFI, it contained little detail on how the DFI should

be managed. The UK needed to settle that issue quickly with the US; spending decisions

could start being made in the next few weeks. The management arrangements needed

to meet the UK’s objectives in terms of transparency and accountability; in particular, the

arrangements needed to meet the commitments in the resolution to use resources in the

DFI “in a transparent manner” and to ensure that oil sales were “made consistent with

international best practice”.

301. The Annotated Agenda for the meeting stated that the CPA had circulated a draft

regulation which gave the US Administration “sole oversight” over DFI spending.159

Such an arrangement would marginalise UK influence and risk presentational problems,

but was not settled US policy. The UK was lobbying in Washington and Baghdad to

amend the draft regulation.

302. On 9 June, Ms Cathy Adams from the Legal Secretariat to the Law Officers

sent a reply to a letter of 21 May from FCO Legal Advisers seeking advice on

resolution 1483.160

303. Ms Adams advised that the resolution clearly imposed joint US/UK responsibility

for disbursements from the DFI, and that it was therefore important to ensure that the

156 Minutes, 22 May 2003, Ad Hoc Group on Iraq Rehabilitation meeting.

157 Paper Cabinet Office, 29 May 2003, ‘Iraq: Update for Ministers’.

158 Annotated Agenda, 5 June 2003, Ad Hoc Group on Iraq Rehabilitation meeting, attaching Paper,

[undated], ‘Implications of and Modalities for the Development Fund for Iraq’.

159 Annotated Agenda, 5 June 2003, Ad Hoc Group on Iraq Rehabilitation meeting.

160 Letter Adams to Llewellyn, 9 June 2003, ‘Iraq: Effect of Security Council Resolution 1483 on the

Authority of the Occupying Powers’.

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