International doubts dog US plans for postwar Iraq

By an OGJ correspondent

NICOSIA, Apr.3 -- Even as US officials try to address growing international concerns about US control of oil fields in postwar Iraq, more doubts have arisen about the near-term potential for any projected boom in the Arab country's oil production.

US Sec. of State Colin Powell briefed EU foreign ministers and NATO leaders in Brussels on the war Thursday and considered their opinions on "the appropriate role" for the United Nations in rebuilding Iraq.

While acknowledging a role for other nations and organizations in rebuilding post-war Iraq, Powell nonetheless maintained Washington's position that coalition forces should be dominant once the government of Iraqi President Saddam Hussein has fallen.

"I think the coalition has to play the leading role," he told a closing news conference. "But that does not mean we have to shut others out. There will definitely be a United Nations role, but what the exact nature of that role will be remains to be seen."

Powell's position on that issue was no surprise. Last week, he said, "We didn't take on this huge burden with our coalition partners and not (plan) to be able to have a significant, dominating control over how it unfolds in the future."

Several European leaders have expressed concern that the US wants control of Iraq's post-war transition period, particularly over its oil industry, and they insist on a post-war rebuilding plan that calls for greater control by the UN.

"After this war, the UN must play the central role as far as the future of Iraq and the new political order is concerned," Chancellor Gerhard Schroeder told the German parliament Thursday. He said, "I would warn against speculating at this point about the details of the necessary reconstruction of Iraq."

Earlier, French President Jacques Chirac, who threatened to use France's veto to block a UN Security Council resolution authorizing the use of force against Iraq, said that allowing the US and Britain to oversee Iraq's post-war transition would be rewarding the "belligerents."

Tony Blair, UK prime minister, called Wednesday for a swift transition to civilian rule after the war, saying that Iraq "should not be run by the Americans, should not be run by the British, should not be run by any outside force or power. It should be run for the first time in decades by the Iraqi people."

But Blair acknowledged there would be "difficulties" over when to make the transition to Iraqi rule, telling parliament that power should be transferred to an interim Iraqi authority "as soon as possible."

US plans call for a post-war military administration under Gen. Tommy Franks, head of the US Central Command, or a deputy, and a civil administration directed by Jay Garner, a retired general who heads the Office of Reconstruction and Humanitarian assistance.

Garner is expected to oversee the civilian administration and to attach US officials to various Iraqi ministries, including oil. In time, control of Iraq's government will
gradually pass to an Iraqi administration. The US, which maintains that Iraq's oil revenue is essential to finance postwar reconstruction, is expected to install a senior American oil executive to oversee Iraq's petroleum industry.

UK Foreign Office Minister Mike O'Brien outlined a British variation of the US plan Wednesday. "What we are doing is establishing the basic administrative structure, security, and law and order after Saddam has gone," he explained. Under the UK proposals, Garner would lead a team, including six British officials, that would make decisions about running basic community services in the first "few weeks" after a war.

"Also, we want to set up an Iraqi interim authority whose job it will then be to take over from Jay Garner to run Iraq as quickly as possible as we can enable that to happen," O'Brien explained. The coalition team would serve temporarily in an advisory capacity to those Iraqi officials

But O'Brien declined to set a time limit on Garner's tenure, saying suggestions of an agreed 90-day period were "misplaced" and that, "it could be a shorter period than that, it could be a slightly longer period than that. It depends on precisely what the circumstances are."

Even as US officials seek to explain their plans for post-war Iraq, however, a UK think-tank said Thursday that uncertainty over any proposed post-war Iraqi government could cause considerable delay in bringing the country's oil production to its full potential.

Postulating an occupation period of 6-24 months, as well as 3-5 years of "controlled transition" to a civilian government in Iraq, the report by the Royal Institute of International Affairs (RIIA) said "a key message" is that "stable conditions for a long-term foreign investment in the Iraqi oil sector can only be created in the third phase when the new Iraqi regime is recognized as independent of the occupying powers."

Oil majors will want to wait for a legitimate new government to settle in Baghdad before risking full-blown investment in undeveloped oilfields, the report explained. "Although Iraq is sitting on massive oil reserves, it will be years before they are tapped," it said. "It is likely to take over 5 years for a legitimate regime to be fully established."

The report forecasts Iraqi oil production growth will be severely restricted after the fall of Hussein. In 5 years, it sees less than 1 million b/d additional Iraqi oil production, on top of the 2.8 million b/d Iraq produced before the Mar. 20 outbreak of war.

The RIIA report predicts that oil companies will be nervous about long-term investment in the early years post-Saddam for fear of losing millions of dollars if a US-installed government fails. It said the 6 million b/d that Iraq is believed capable of producing would have to wait "the emergence of a truly independent Iraq" willing to engage major companies on stable terms.

The report said any transitional government within 2 years after an initial US occupation would find it "very difficult" to offer the stable fiscal or legal framework or political investment climate to attract long-term private investment.