10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
459.
The Strategy
defined three UK objectives:
“•
The
development of an efficient, outward-looking and transparent oil
and
gas
industry, capable of delivering sustainable export revenues to meet
the
development
needs of the people of Iraq and meeting domestic needs
for
energy in
an efficient, equitable and secure manner.
•
Increasing
involvement of the private sector, leading to sustained
investment
over the
next five to 10 years and substantial business for UK companies
…
•
To promote
Iraq’s role in international oil and gas markets and as a
constructive
influence
within OPEC.”
460.
The Strategy
stated that, in the absence of an “extremely high” oil price,
only
the
international oil companies could provide the funding necessary to
achieve rapid
rehabilitation
or significant new development.
461.
The Strategy
set out four considerations that shaped it:
•
Energy
security. The UK was expected to be a net importer of oil by
2010.
Against a
backdrop of volatile prices and limited spare global
production
capacity,
sustainable increases in Iraqi production would make a
large
contribution
to global energy security.
•
The UK’s
commercial and international development goals, including Iraq’s
fiscal
stability
given the need to finance reconstruction. The idea that Iraq’s
energy
development
needs were best served through FDI would be politically
sensitive,
both in
Iraq and internationally. The UK would “promote the message on FDI
to
the Iraqis
in private, but it will require careful handling to avoid the
impression
that we are
trying to push the Iraqis down one particular path”.
•
The need
for energy price reform, required under the IMF
programme.
•
Oil
development and the Constitution.
462.
Mr Straw
sent the Strategy to Mr Blair on 12 July.266
In his
covering letter, Mr Straw
wrote:
“Oil and
gas will inevitably form the economic foundation for Iraq’s future
and
remains
important for the UK commercially and in terms of energy
security.
Foreign
investment is badly needed and we need to continue to support Iraq
to
create the
right framework for investment, while also supporting UK companies
to
engage. And
we should continue working with the Iraqi Government to ensure the
oil
sector
develops transparently and along lines of international best
practice.”
463.
Mr David
Quarrey, Mr Blair’s Private Secretary, sent the Strategy to
Sir Nigel
Sheinwald
with the comment: “I do not intend to put in the box! Looks
OK.”267
266
Letter
Straw to Blair, 12 July 2005, ‘Iraq: Oil and Gas
Strategy’.
267
Manuscript
comment Quarrey to Sheinwald, 13 July 2005, on Letter Straw to
Blair, 12 July 2005,
‘Iraq: Oil
and Gas Strategy’.
443