3. PRODUCTOS, RESULTADOS Y ENTREGABLES OBTENIDOS
3.2 Ecosistema del negocio y propuesta de valor para stakeholders
3.2.2 Propuesta de valor para stakeholders
In late July 2003, the London Middle East Institute produced a study on the political economy of oil and democracy-building in Iraq, which had been commissioned by the Department for International Development (DFID).177
A junior DFID official circulated the study to DFID and Treasury officials only on 31 July. He advised that the study evaluated a range of options for the allocation of oil revenues and the ownership of the oil industry. A central message from the study was that any arrangement would have long-term political, economic and social implications. There were no “risk-free” options.
The official highlighted a number of the study’s conclusions, including:
•
a “cautious, incremental” approach to unbundling upstream production and downstream distribution systems to create a deconcentrated ownership structure, which could eventually be incorporated into a graduated privatisation process, was preferable to “rapid privatisation”; and•
while production-sharing agreements (PSAs) might be economically attractive in terms of mobilising capital and technology, they were unlikely to have “positive distributional benefits” and might constrain future political development.327. By August, the US was focusing its efforts on increasing oil production. The UK
believed there was also a need to develop sector policy and strategy. The US rebuffed UK attempts to provide an oil policy expert.
328. The DTI provided an update on the oil sector to the 7 August meeting of the AHMGIR.178
329. The DTI reported that oil production, hampered mainly by sabotage and power shortages, was between 1m and 1.2m bpd – still less than half pre-conflict levels. Despite significant imports, refined petroleum products, gasoline, petrol and gas for cooking and heating remained in short supply.
330. The CPA Oil Team was focused on restoring oil production to pre-conflict levels, leaving all other issues to the Iraqi authorities. The UK believed that there was a need
176 Coalition Provisional Authority, Order No.39, 19 September 2003, Foreign Investment.
177 Minute DFID [junior official] to DFID [junior official], 31 July 2003, ‘Study on the Political Economy of Oil and Democracy Building in Iraq’ attaching Report, 24 July 2003, ‘The Political Economy of Oil and Democracy Building in Iraq’.
178 Annotated Agenda, 7 August 2003, Ad Hoc Group on Iraq Rehabilitation meeting attaching Paper DTI, 6 August 2003, ‘Iraqi Oil Sector Update 07 August 03’.
to develop “longer-term strategies and options”; a well-run oil industry was essential to Iraq’s recovery and thus to the Coalition’s overall strategy.
331. The UK had selected Mr Terry Adams to join the CPA Oil Team as a technical expert and Mr Ian Fletcher, Sir Andrew Turnbull’s Principal Private Secretary,179 to join
the CPA Oil Team as an oil policy expert. One of Mr Fletcher’s main tasks would be to help develop those longer-term strategies. The DTI reported that the CPA had welcomed Mr Adams’ appointment, but had been “less than enthusiastic” about Mr Fletcher’s, possibly because of its view that longer-term issues should be left to the Iraqi authorities.
332. The Annotated Agenda for the AHMGIR reported that the current Iraqi Ministry of Oil target was to increase oil production to pre-conflict levels by April 2004; that appeared optimistic.180 Uncertainties over oil production levels and the oil price meant
that oil revenues for 2004 remained unpredictable.
333. The Annotated Agenda stated that:
“Our major concerns are that the CPA and Iraqi experts are focused on revising production in the short-term and giving insufficient consideration to long-term strategy …
“We are therefore seeking to engage the US Administration and CPA leadership over oil sector issues in order to gain influence over decisions and policy. We are inserting two senior people into the CPA Oil Team …”
334. The UK and the US had agreed to establish a “senior bilateral official-level working group” on “long-term oil sector issues”.
335. The UK was also beginning a debate with the Iraqi Ministry of Oil on ways to
address its skills gap.
336. Mr Bearpark commented in a meeting with DFID officials on 11 August that the UK
did not have much hope of getting senior people into the oil sector, which was “sewn up by the US”.181 The record of that meeting was copied only within DFID.
337. On 10 and 11 August, Basra experienced severe rioting.
179 Minute DTI [junior official] to PS/Mrs Hewitt, 23 July 2003, ‘Next Meeting of the Ad Hoc Ministerial Group on Iraq’.
180 Annotated Agenda, 7 August 2003, Ad Hoc Group on Iraq Rehabilitation meeting.
181 Minute DFID [junior official] to PPS/Baroness Amos, 12 August 2003, ‘Iraq: Meeting with CPA Director of Operations’.
338. Mr David Richmond, the Prime Minister’s Acting Special Representative on Iraq,182
reported to the FCO:
“The immediate cause of the disturbances is clear. Supplies of petrol and diesel in Basra’s service stations ran out on 9 August … This was combined with a major blackout in Basra … There is no doubt that political elements … exploited the situation. There is also evidence of pre-planning … but without the fuel and electricity crisis, agitators would not have found much purchase.”183
339. Section 10.1 describes the UK’s response, including the development of the US$127m Essential Services Plan, which aimed to improve fuel, power and water infrastructure in Basra, and the redeployment of UK troops to secure fuel facilities.
340. Mr Adams deployed to Iraq in mid-September.184