Global Policy Forum

Control of Oil Ministry Divides Factions in Iraq


By Hassan Hafidh

Wall Street Journal
March 25, 2005

The latest stumbling block to forming a new Iraqi government is the post of oil minister, in a sign that Iraq's greatest asset -- its vast oil wealth -- is being caught up in the tug-of-war among the country's major ethnic groups. The two groups that got the most votes in the January elections, an alliance of Shiite Muslim parties and the ethnic Kurdish slate, each want to control the oil portfolio, Iraqi politicians and officials said yesterday.

A misstep in choosing a minister could delay further the recovery of the country's oil industry at a time when the lack of progress is contributing to record-high oil prices. Iraq is struggling to get its output back to prewar levels of about 2.5 million barrels a day and to catch up with its contractual commitments to deliver crude after months of delays.

In Iraq, "95% of the country is the oil business, and it is in such deplorable shape that very, very significant planning and capital decisions have to be made," said Rob McKee, who was an oil adviser to the initial U.S.-led Coalition Provisional Authority in Iraq. "If you get the wrong kind of person into the job -- a politician who is more interested in making decisions that may aid him or his party later -- then you have trouble."

The Shiite United Iraqi Alliance won 140 seats in the National Assembly but needs the Kurds' 75 seats to get the two-thirds majority required to name a government. After weeks of negotiations, the two sides appear to have agreed on candidates for prime minister -- Shiite politician Ibrahim al-Jaafari -- and president -- Kurdish leader Jalal Talabani. But on the oil portfolio, so far neither group seems willing to back down. "The Kurds want to occupy the post, but we think the alliance is the one which deserves the post, because it scored sweeping victory in the elections," said Abbas al-Bayati, a top member of the Shiite alliance.

Alliance candidates for the post include Ibrahim Bahr al-Uloum, a former oil minister, and Abdul Saheb Quteb, currently an adviser at the oil ministry. Many buyers of Iraqi oil consider the ministry's current leadership, headed by veteran oil official Thamer al-Ghadhban, as capable and professional. "It would be stupid to change Ghadhban now," said a buyer of Iraqi crude with a major oil company. "After all the upheaval, we need to keep the continuity in there." That appears unlikely. Mr. Ghadhban is a Shiite, but he belongs to the party of current interim Prime Minister Ayad Alawi, which won too few seats in the assembly to form a government.

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