Watching Government:Iraq consensus

April 26, 2004
Iraq consensus Just as multinationals anticipated, it could be years before Iraq holds serious promise for oil companies.

Just as multinationals anticipated, it could be years before Iraq holds serious promise for oil companies.

"The Shia uprising in Iraq, and an ugly bout of kidnappings of foreign workers there, surely makes the June power transfer more difficult and the investment case in Iraq's upstream impossible for now," noted Deutsche Bank AG analysts in a Apr. 20 note to clients.

Indeed, Iraq now is a scary place for oil contractors and military personnel, who against long odds largely have succeeded in repairing war-related damage to the current infrastructure.

But looking ahead, there are encouraging signs the US and the United Nations together may put the country on the road to stability in months instead of years.

Transitions

The US continues to pledge that Iraqis will regain control of the government June 30, although coalition forces will retain a large presence. Exactly how much influence the US will retain over policy still is being resolved among the US, UN, and Iraq.

Even within the US, a debate continues between the Pentagon and the Department of State over each agency's role in rebuilding efforts.

Looking to push the process forward, US President George W. Bush Apr. 19 nominated John Negroponte, the top US diplomat at the UN, to be the new US ambassador to Iraq.

A closely divided US Senate is expected to confirm the veteran attaché before summer.

But his nomination hearing will likely be contentious, as some lawmakers will use the proceedings as a way to criticize the president's overall handling of reconstruction.

Negroponte, 64, will oversee what Bush called a "very difficult" assignment.

"No doubt in my mind he can handle it. No doubt in my mind he'll do a very good job. And there's no doubt in my mind that Iraq will be free and democratic and peaceful," Bush said Apr. 19.

"I expect the focus of our efforts to be on supporting a free and stable Iraq, at peace with its neighbors. Collaboration with the international community, especially the United Nations, will be a very important part of this endeavor," Negroponte said.

UN oil probe

Negroponte also will play a major role in sorting out a still-unfolding probe of the UN's expired Oil for Food program.

In testimony before the Senate Foreign Relations Committee Apr. 7, Negroponte pledged to lawmakers the "fullest support" in helping the US Congress, the UN, Iraq, and other stakeholders determine the extent and involvement of wrongdoing.

Negroponte also told the committee that during the life of the aid program, the US "to the best of my knowledge" was not aware of allegations of abuse, fraud, or corruption against those UN officials responsible for the program (OGJ, Apr. 12, 2004, p. 17).

Separately, UN Sec. Gen. Kofi Annan Apr. 16 appointed former Federal Reserve chairman Paul Volcker to head an independent panel to investigate corruption charges at the UN related to the program.