10.3  |  Reconstruction: oil, commercial interests, debt relief, asylum and stabilisation policy

Governments. Dr Hawramy thought PSAs were the only agreements that IOCs would

consider.

502.  UK officials responded that contracts should be signed by central Government.

Dr Hawramy asked the UK to stop discouraging IOCs from investing in the Kurdish

region.

503.  An IPU official commented:

“While … IOCs such as Shell and BP are currently unwilling to invest in the KRG,

as the gap widens between the investment climate in the KRG and the rest of the

country, a westernised, technocratic KRG Minister offering good PSA terms under

a KRG Petroleum Law is going to be increasingly tempting.

…

“We were expecting him [Dr Hawramy] to express irritation at being excluded from

central Government decision-making … The impression he gave was more that

the KRG was quite content to press on regardless … We will need to work hard to

persuade the Kurds that there is a game worth playing at the centre.”

504.  Dr Howells visited Baghdad and the Kurdish Region from 6 to 7 July.291 It was the

first visit to the Kurdish region by a British Minister since 2004.

505.  KRG Prime Minister Barzani told Dr Howells that relations between the KRG and

the federal Government had “soured over oil”.

506.  Dr Hawramy outlined the KRG’s draft Oil Plan and Petroleum Law. Dr Howells

encouraged Dr Hawramy to “work through” the Oil Plan with the federal Government,

and said that it was vitally important that the KRG Petroleum Law and the federal

Government’s Hydrocarbons Law complemented each other.

507.  The British Embassy Baghdad commented:

“The meetings [with Dr Howells] showed KRG determination to push forward on

energy and reconstruction, the Oil Plan and the draft Petroleum Law being the

flagships of their efforts.”

508.  Mr Wicks met Dr Shahristani in London on 24 July.

509.  Mr Wicks’ briefing for the meeting stated that, while the UK had not seen a draft of

the Hydrocarbons Law, it understood that it gave the federal Government responsibility

for signing new oil exploration and production contracts: “This is a course of action that

291 eGram 29832/06 Baghdad to FCO London, 11 July 2006, ‘Iraq: Dr Howells Visit to Kurdistan 6-7 July

2006’.

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