Reports: US State Department influenced awarding of oil contracts; Congressional Committee criticizes deal made by Hunt oil with Kurdistan regional government
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    • Just two weeks after Iraq announced the opening of its gas fields through the no-bids contract, reports have been buzzing with the possible involvement of American State department officials in brokering the deal. American officials on their part have
    however vehemently denied any involvement in the drawing up the contracts.

    When the Iraqi government announced its decision to open its oil and gas fields, it declared that the companies short-listed under the no-bid contract had been selected because they had the required technical expertise to explore the Iraqi fields. They also pointed out that the present arrangements were temporary and that these agreements would be replaced once the oil law was passed.

    However, recent reports quoted unnamed government officials as saying that a group of American advisers, led by a State Department team, had played an integral part in drawing up the contracts between the Iraqi government and five major Western oil companies - Exxon Mobil, Total, Shell, BP and Chevron to develop some of the largest fields in Iraq. American officials have countered the assertion on grounds that their role was limited to technical advice only. Pointing out that the Iraqi government had full discretion to accept or refuse their suggestions, they noted that Baghdad often sought advice from the Norwegian government also.

    Certain areas of criticism remain. Most important of which was the fact that only Western companies received the biggest oil contracts under the no-bid arrangement. In particular, Russian companies that have had experience in Iraq and had sought development contracts were still being kept in the dark1.

    The beleaguered Bush administration meanwhile seemed headed for another round of embarrassment on the oil deals issue. A Congressional committee disclosed evidence of an oil deal signed by Hunt Oil of Dallas with the Kurdistan government last September.
    The deal ran counter to the stated American policy of warning companies of the risks involved in signing contracts with regional governments in the absence of a national oil law2. The committee disclosed that the Bush administration had full knowledge of the deal and that it did nothing to discourage the company from going ahead with it. The company reportedly enjoyed close ties with President Bush.

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