Oil in a Week – Tawke-Gate II

The Norwegian business newspaper Dagens Naeringsliv continued to publish its series of investigative reports regarding the role of Peter Galbraith, the former U.S diplomat and constitutional advisor to the Kurdistan Regional Government (KRG), and one of the most prominent advocates for the partitioning of Iraq and ending the Iraqi state.

Last week, the newspaper published new information revealing that Peter Galbraith had been working as a consultant for the private Norwegian oil company DNO in 2004, in return for an annual salary of 200 thousand dollars, before subsequently investing 5 million dollars and becoming a partner in the Tawke field, with a 5 percent stake.

If anything, this means that Galbraith had been a consultant in this company at the same time that he, by appointment from the KRG, was playing a major role in drafting the Iraqi constitution which gave almost unlimited powers to the provinces in their negotiations with international oil companies, and in signing contracts and agreements with the latter without the need to consult the Iraqi Oil Ministry. This is in addition to his political role and involvement with the media in the United States during that period, specifically in what relates to the partitioning of Iraq. This also means that Galbraith’s aims behind his campaign to “end” the state of Iraq was to assist oil companies in their bids to secure exploration, drilling and production contracts with the KRG, without the need for any transparency.

It is worth mentioning here that the Kurdish officials have insisted that the provisions related to petroleum, which were drafted by Galbraith should not be changed; otherwise, they would reject the entire constitution. The parliamentary constitutional committee was thus forced to “pass” the draft constitution despite its own reservations regarding its provisions, and in spite of all the protests expressed by the Iraqi oil experts regarding its [the constitution’s] inherent dangers and menaces.

In fact, Galbraith’s experience reminded the Iraqis of the role of Mr. Five Percent (Gulbenkian), who was the middleman working with the major powers and their oil companies following the Great War, and who cofounded the Iraqi Petroleum Company (IPC) following the collapse of the Ottoman Empire; as a result, he acquired a 5 percent stake in the Iraqi oil revenues for decades to come.

Of course, there is a huge difference between Galbraith and Gulbenkian. The first was a consultant, and then a 5 percent partner in a small company that operates in an oil field whose maximum capacity does not exceed one hundred thousand barrels per day, and is as such a small oil field when compared to the overall Iraqi production capacity. Yet, Galbraith’s role was important and significant in shaping the [new] Iraqi state, and its oil industry.

In what concerns the Iraqi state in fact, the political process in Iraq has been preoccupied since Day One with the disputes over the ambiguous constitution that is full of contradictions (which themselves give rise to further disputes, as evident from the experiences of the past few years.) In fact, the disputes that came to light in Iraq this week about the issue of Kirkuk are only one aspect of the problems that the country had inherited from Galbraith’s legacy – who served many interests, starting with his own material interest and not ending with supporting the Kurdistan region at the expense of the rest of the country, and the interests of international oil conglomerates at the expense of the Iraqi state itself. However, most important of all of this perhaps, is his role in drafting the constitution which excluded any role for the Iraqi Oil Ministry in negotiating with international companies, all in order for him to expand his investments in the Iraqi oil sector without the need for transparency, and for the benefit of the above-mentioned companies.

It would have been possible to overlook the Galbraith scandal, if we had only seen it as an attempt to make profit from the Iraqi oil, since corruption is already spread all around Iraq, not to mention the theft of crude oil and petroleum products. This latter alone generated much more profits that those acquired by Galbraith (where smuggling and theft amounted to about 10 million dollars per day, according to the U.S and Iraqi reports).

In the end, the most important facet of the Galbraith issue is hence his role in drafting the constitution, and the point of view he was promoting in the United States that Iraq has “ended” and that its inevitable fate is to be partitioned. This is not to mention the rift he has caused in the Iraqi oil industry through the ambiguous and often contradicting constitutional provisions regarding hydrocarbons, and which seem to have no other aim but to give the foreign companies a free hand in the Iraqi oil sector through the abuse of power, and the marginalization of the supervisory roles of the Iraqi Oil Ministry.

*. Mr. Khadduri is an energy expert