The Report
of the Iraq Inquiry
521.
The British
Embassy Baghdad produced a “core script” setting out the
UK’s
response to
the draft Hydrocarbons Law on 7 November.298
Key
messages for the UK
to relay
to Iraqi contacts included:
•
It was
crucial that an agreed national law was passed soon, given
the
importance
of oil to national economic and security interests.
•
The Iraqi
Constitution stated that oil resources belonged to all Iraqi
citizens.
The federal
Government was best placed to ensure that those resources
were
developed
to the maximum benefit for all Iraqi citizens.
•
A national
law should be agreed before the KRG passed a regional
law.
522.
UK officials
continued to meet regularly with Ministers and senior
officials
in the
Iraqi Government and the KRG to discuss progress towards agreeing
a
Hydrocarbon Law.
523.
The IPU
provided Dr Howells with an update on negotiations on a
Hydrocarbons
Law on 14
February 2007.299
While there
was not yet any agreement, there was a
“strong
impetus to achieve consensus”. President Bush had indentified the
passing of
the
Hydrocarbons Law as a key indicator of progress in Iraq. The US
Ambassador was
working
hard to bring the key players together. The UK had “remained in
close touch
with the
key negotiators … in support”.
524.
The update
advised that the latest draft Hydrocarbons Law addressed only
two
of the
four principles which the UK had defined in September 2006 (it
would establish
a national
public-sector oil company and contained helpful clauses on
transparency).
525.
The update
proposed that, while the UK’s influence was “limited”, it
should,
alongside
the US, continue to lobby key Iraqi players, and encourage the IMF
and
World Bank
to play an active role in providing assistance and advice on the
more
technical
aspects of the negotiations.
526.
Dr Howells
accepted that proposal, and agreed that the UK’s influence
was
527.
Mr Asquith
reported from Baghdad in May that disagreements continued
over
the extent
of regional authority in the oil sector and on the implications of
foreign
investment.301
He
commented:
“The
political mood makes quick passage of the HCL [Hydrocarbons Law]
unlikely.
Differences
between the Kurds and Baghdad go beyond simple posturing,
with
Kurdish
hardball tactics generating worrying anti-Kurdish sentiment among
Arab
politicians.
Resolution by the summer would be an
achievement.”
298
Email FCO
[junior official] to IPU [junior official], 7 November 2006, ‘HCL –
Core Script’.
299
Minute IPU
[junior official] to PS/Dr Howells, 14 February 2007, ‘Iraq:
Hydrocarbons Law Update’.
300
Email
APS/Howells [FCO] to junior official [IPU], 19 February 2007,
‘Iraq: Hydrocarbons Law Update’.
301
eGram
20342/07 Baghdad to FCO London, 14 May 2007, ‘Iraq: Update on the
Hydrocarbons Law’.
452