Posts on “Oil: July 2008” in July 2008

Top NeoCon Richard Perle Seeks Oil Deal With Iraqi Kurds

Richard Perle has almost always gone along with the Bush administration's policies.

But now the longtime neoconservative policy wonk is trying to get in on an oil-drilling deal with Iraqi Kurds despite the administration's public opposition to such deals there.

Perle, one of the most influential proponents of 2003 invasion of Iraq, is in talks to join a consortium of investors with the Kurdish Regional Government, today's Wall Street Journal reports.

The Bush administration has publicly discouraged energy firms from making unilateral deals with Iraqi Kurds until after Iraq's federal government in Baghdad agrees to a law for sharing future revenues. Disagreements over oil money have inflamed sectarian tensions in Iraq and undermined political unity.

But investigators are looking into whether the Bush administration privately gave the go-ahead to energy firms seeking the lucrative deals with the Kurds.

The Journal reports that Perle is talking with a Turkish firm, AK Group International, and also a representative from the government of Kazakhstan. They are targeting the co-called "K18 concession" which is near the city of Erbil and is estimated to hold 150 million or more barrels of oil.

Houston-based Endeavour International would conduct the exploration and drilling, according to the Journal.

During the run-up to the Iraq war, Perle was chairman of the Defense Policy Board, which advises the Pentagon. He is currently a scholar at the American Enterprise Institute, a conservative think-tank in Washington.

State IG to Probe Deals Between Texas Oil Firm and Iraqi Kurds

Publicly, the U.S. State Department said it was discouraging U.S. oil companies from forging deals with Iraqi Kurds last year.

But privately, Bush administration officials may have sent different signals.

Now the State Department's Inspector General has launched an investigation into what exactly was said to whom.

The New York Times reports:

The State Department's internal watchdog division will investigate allegations that department officials did nothing to prevent a Texas oil company with close ties to President Bush from concluding an oil deal with the Kurdistan regional government that undermined both American policy and the Iraqi central government.

The Kurds' deal last year with Hunt Oil Company of Dallas -- and similar contracts between the Kurds and other energy companies -- have infuriated the Iraqi government, which has called them "illegal" attempts to usurp Baghdad's authority.

American officials have also stated publicly that the contracts undermine Baghdad's fragile central government and that they have discouraged such deals until the Iraqi government passes a national oil law.

But earlier this month a Congressional committee released internal e-mail messages and documents from the State Department and Hunt Oil that suggested that State Department officials did not try to dissuade Hunt Oil from signing the deal with the Kurds.

This week, the acting inspector general of the State Department, Harold W. Geisel, disclosed in a letter to lawmakers, which was also provided to The New York Times, that he had "initiated a review of the responses provided to the Congress recently on the issues surrounding oil contracts, oil field development and U.S. policy in Iraq."


Lawmakers Call On State Department To Investigate Oil Deals

First we heard about how Texas-based Hunt Oil might have gotten a behind-the-scenes thumbs up to forge an oil deal with the Kurdish Regional Government in Iraq.

We say behind-the-scenes because officially the White House and State Department opposed all oil deals with the Kurds until the Iraqi federal government in Baghdad reached a deal on oil-revenue sharing. (which they haven't yet)

Last week we told you about how Bob Schaffer, the Republican candidate for Senate from Colorado, helped forge a deal between Aspect Energy, where he worked, and the Kurds at about the same time last fall.

Now several lawmakers want the State Department's Inspector General to investigate the matter.

From the AP:

Any behind-the-scenes meddling would have violated administration policy, which was to discourage the business dealings until Baghdad passed a law that would fairly divide the nation's oil resources among the various provinces. The hydrocarbon law is widely seen as necessary to prevent sectarian tensions once Iraq boosts its oil production.

"We are concerned that U.S. policy regarding these oil contracts has not been clearly defined, communicated, or consistently implemented by the Iraqi government, the Kurdistan Regional Government and international oil companies seeking to do business in Iraq," the lawmakers wrote in a letter to Harold Geisel, the State Department's acting inspector general.

The letter was signed by [Sen. Carl Levin] Levin, D-Mich., chairman of the Senate Armed Services Committee, as well as Democratic Sens. Chuck Schumer of New York, John Kerry of Massachusetts and Claire McCaskill of Missouri.

Late Update: Read more for the text of the entire letter.

Read more »

Bob Schaffer Helped Out With Kurdish Oil Deal Opposed By US State Department

Bob Schaffer voted for the war in Iraq in 2002, then left Congress and went to work for the oil men hoping to profit from it.

We recently learned that the energy company that the Colorado Republican went to work for in 2003, Aspect Energy, is among the handful of companies who signed deals with Iraq's Kurdish Regional Government last year.

Those oil deals were officially opposed by the Bush administration, but maybe tacilty endorsed behind closed doors.

Schaffer visited Iraq's Kurdish region in November 2006 along with other officials from Aspect Energy.

State Department officials say those oil deals have threatened security in Iraq by undermining the federal government in Baghdad, which about 150,000 U.S. troops are now helping to prop up.

Schaffer said he had no idea that U.S. officials formally opposed to such deals.

Schaffer said he was unaware the State Department had warned energy firms not to strike oil deals with the Kurdistan Regional Government at the time of his visit. "We didn't experience any discouragement," Schaffer said.

Reader EL points out that Schaffer's ties to big oil have been a big campaign issue for him in his race for the Senate this year.

Late Update The Daily Sentinel in Colorado has a taped interview of Schaffer talking about his trip to Iraq and the oil contract.

Waxman Says White House Knew About Hunt Oil Deal In Iraq

House oversight committee Chairman Henry Waxman says the Bush Administration knew about the September 2007 deal that Texas-based Hunt Oil struck with Kurdish officials in Iraq.

That contradicts what President Bush said at the time.

That deal was controversial because it came at a time of precarious negotiations in Baghdad about a possible revenue-sharing agreement between the warring factions in Iraq. The Kurds decision to forge a deal independent of the Baghdad government angered the Sunni and Shia Arabs in Iraq.

In a letter to Secretary of State Condoleezza Rice, Waxman asked for further information about the U.S. involvement in Iraqi oil deals, the Hunt Oil deal as well as more recent deals. He quoted the president speaking shortly after the deal was announced almost a year ago.

Administration officials criticized the Hunt Oil contract because it jeopardized the efforts of the Iraqi parliament to come to an agreement on the national oil legislation. When President Bush was asked about the Hunt Oil contract, he stated:

"I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I'm concerned"


Waxman said his committee has conducted an investigation of the Hunt Oil deal.

The documents that the Committee has received tell a different story about the role of Administration officials. Ray Hunt, the head of Hunt Oil, personally informed advisors to President Bush of meetings he and other Hunt Oil officials planned with representatives of the Kurdish government. Other Hunt Oil officials kept State Department officials informed about the company' s intentions.



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