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AFTER THE WAR

U.S. Names 3 to Oversee Iraq's Oil Industry

Two ex-regime officials are among appointees. But the choice of an American to lead a panel fuels concerns on Washington's agenda.

May 04, 2003|Warren Vieth and Mark Fineman | Times Staff Writers

WASHINGTON — Amid concerns over U.S. intentions toward Iraq's oil, a retired American oilman, an Iraqi expatriate and a Baghdad insider were named Saturday to try to reconcile potentially conflicting priorities in the postwar energy industry.

Oil experts said the appointments, made by the United States, represented an attempt to strike a balance among the competing interests -- and egos -- of U.S. officials, Iraqi exiles and petroleum professionals who remained in the country.

But the creation of a multinational oversight board, and the choice of an American to head it, suggested that Iraqis will not have a free hand to run the industry as they see fit, some analysts said.

"There's a deep concern about how things will turn out if America tries to impose its values and its ideas on the management of Iraq's oil industry," said Valerie Marcel, a Middle East oil specialist at London's Royal Institute of International Affairs. "People are quite worried."

U.S. authorities in Baghdad announced the appointments of former Shell Oil Chief Executive Philip Carroll and former Iraqi oil marketing chief Fadhil Othman as chairman and vice chairman, respectively, of a corporate-style advisory board assigned to oversee Iraq's oil industry until a new government is in place.

Thamir Ghadhban, who was director of planning at Iraq's Oil Ministry when the war broke out in March, will serve as chief executive officer of an interim oil industry management team, U.S. officials said.

The selection of Othman and Carroll -- who has ties to an Irvine firm that is vying for reconstruction projects in the country -- as advisory board members had been widely anticipated in industry circles. The choice of Ghadhban to run day-to-day operations was made on the board's advice, officials said.

"In the first days following the fall of the Saddam regime, Mr. Ghadhban voluntarily stepped into an ad hoc and effective leadership role in the ministry," the Office of Reconstruction and Humanitarian Assistance said in a statement.

Some analysts said they consider the administration's handling of the hobbled petroleum industry an important litmus test of U.S. intentions in Iraq.

Based on what they have seen so far, they said the postwar plan appeared to reflect a distinctly American agenda. Ghadhban might be making decisions on the ground, but officials in Washington are likely to be looking over his shoulder, the analysts said.

"The advisory board is going to be planning Iraqi oil policy and defining projects and approving budgets," said Walid Khadduri, executive editor of the Middle East Economic Survey in Cyprus. "What's left for the Iraqi oil industry to do? Just implement policy that has been designed somewhere else."

That perception of U.S. intentions has rankled the hundreds of Iraqi petroleum professionals who have kept their industry running through three decades of war, sanctions and chronic neglect by Saddam Hussein's regime, experts said.

"Iraqi oil professionals are very proud," said former Iraqi Oil Minister Issam Chalabi, now an industry consultant in Jordan. "They're all saying: 'What's wrong with us? We can do the job. We did it during the Iraq-Iran war. We did it after the [1991 Persian] Gulf War. Why bring in people from the outside?' "

The resentment has been exacerbated by persistent reports of a U.S. interest in privatizing the industry, either by allowing outsiders to invest in future development or transferring ownership of state-run companies to private hands.

"Privatization is a very touchy issue," Chalabi said. "The minute you mention that word, people look at you with great suspicion. This is certainly not the time to talk about such things."

Administration officials have said it is too soon to pass judgment on their stewardship. They insist that Iraqi insiders and "expats" such as Ghadhban and Othman will play key roles in running the industry.

Although some U.S. advisors favor privatization, they say those and other long-term issues will be left to the next government of Iraq to decide. In the meantime, they say, Iraq's petroleum resources are being held "in trust" for its people.

"Their rhetoric is hard to argue with," said Michael Renner, who tracks the oil industry for Worldwatch Institute, a Washington-based environmental group. "But what we have seen so far speaks a different language. Whether it's intended or not, the signal that is coming across is that this is going to be a U.S.-run operation and decisions are going to be made not by Iraqis, but by outsiders."

Some experts say it makes sense for the administration to try to influence the industry.

"The United States needs to help set the Iraqi economy on a reasonable footing," said Larry Goldstein, president of the Petroleum Industry Research Foundation in New York. "To do that, we need to be involved in selecting people who share a common philosophy ... not dictating, but playing a role in deciding who will be heading the Iraqi oil company in the future."

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