The Report
of the Iraq Inquiry
analysis
presented in a December 2003 USAID-funded report, Options for
Developing
a Long
Term Sustainable Iraqi Oil Industry.253
438.
The Terms of
Reference for the consultancy stated:
“The Iraqi
Government has given broad endorsement (for example through
Prime
Minister
Allawi’s Guidelines on Petroleum Policy) to PSAs as the best means
of
facilitating
foreign investment in the petroleum sector. It is important the
MoO
[Ministry
of Oil] develop a good understanding of how PSAs work if Iraq is to
create
a stable
contracts regime that effectively serves Iraq’s longer-term
developmental
needs and
the imperative of FDI.”254
439.
The planned
outputs of the project included model contracts, including for
PSAs.
440.
Mr Chaplin
called on Prime Minister Allawi on 13 December.255
Mr Chaplin
reported
that he had
taken the opportunity to raise “BP and Shell’s interests”. He had
also
informed
Prime Minister Allawi that the UK Government had agreed to fund
Mr Terry
Adams
(formerly of the CPA Oil Team) to assist the Ministry of Oil to
draft “model
production
sharing agreements”.
441.
Mr Chaplin
reported that Prime Minister Allawi had said that he had made clear
to
the Supreme
Oil and Gas Council that priority should be given to US and UK
companies.
Mr Chaplin
commented:
“His [Prime
Minister Allawi’s] wish to favour UK companies is sincere. But
others in
the system
are not so well-disposed, so patience is required.”
442.
A briefing
prepared for Sir Nigel Sheinwald, Mr Blair’s Foreign
Policy Adviser, on
17 January
2005 stated that:
“Ministry
of Oil preoccupied with Baghdad fuel crisis and the protection of
the oil
infrastructure
– meaningful engagement with the Ministry will have to wait until
after
443.
The briefing
also stated that a plan to establish an INOC as an
independent,
state-run
corporation “appears to have been approved”, although it was
unlikely to be
implemented
before the elections. The briefing described the creation of an
independent,
state-run
INOC as one of the UK’s main priorities.
253
Report, 19
December 2003, Options for
Developing a Long Term Sustainable Iraqi Oil Industry.
254
Paper FCO,
[undated], ‘Terms of Reference: Assistance in creating a stable
petroleum contracts regime
and a
modern, transparent and efficiently run Iraqi National Oil Company
(INOC)’.
255
Telegram
472 Baghdad to FCO London, 13 December 2004, ‘Iraq: Call on
Allawi’.
256
Briefing,
[undated], ‘Briefing for Nigel Sheinwald’s Meeting with Malcolm
Brinded (Shell): 17 January’.
440