10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
Government,
prompted the UK Government to consider what it would be able to do
if
a UK
company did the same.273
473.
Mr Dominic
Asquith, FCO Director Iraq, advised officials on 6 December that,
in
dealing
with previous approaches from UK companies, he had said
that:
•
any
contract must be with the explicit agreement of the Iraqi
Government;
•
any
contract must have the support of the KRG, rather than any one
element
of it;
•
even then,
the legal position would be “fragile”; and
•
“so wait
until things become clearer”.274
474.
FCO and IPU
officials agreed that those lines were appropriate.275
475.
Mr William
Patey, British Ambassador to Iraq, reported on 13 December 2005
that:
“Oil is the
critical factor in Iraq’s economic revival. Increased revenue in
2006
will depend
on a continued programme of rehabilitation of current wells
and
infrastructure
and, more importantly, improved security in the north.
Serious
increases will require more radical surgery. The new Government
will need
to focus
quickly on commercialising the oil industry and a legislative
framework to
attract
investment. The future will be complicated by discussions on
constitutional
476.
The pace of
rehabilitation was slow. The Ministry of Oil spent less than 10
percent
of its
annual capital investment budget of US$3bn (the money was used
instead to pay
for
additional subsidised fuel imports).
477.
There were
rumours that a number of draft Petroleum Laws existed, but no
one
had seen
them. The provisions in the Constitution on oil were unclear;
ownership of
the oil and
how it should be managed would need to be clarified by the
Constitutional
Committee.
478.
In its
dialogue with potential Prime Ministers, the Embassy had
emphasised:
•
the
importance of “getting the oil sector right” and of increasing
production;
•
the need
for greater World Bank involvement in the sector, which would
give
access to
additional financing on good terms and policy advice;
and
273
Email
Asquith to FCO [junior official], 30 November 2005, ‘Norwegian oil
deal with Kurds angers Iraq’s
Sunnis’.
274
Email
Asquith to DTI [junior official], 6 December 2005, ‘Norwegian oil
deal with Kurds angers Iraq’s
Sunnis’.
275
Email IPU
[junior official] to Asquith, 7 December 2005, ‘Norwegian oil deal
with Kurds angers Iraq’s
Sunnis’.
276
eGram
20655/05 Baghdad to FCO London, 13 December 2005, ‘Iraq:
Oil’.
445