

Currently released so far... 12478 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
AU
ASEC
AE
AF
AORC
AEMR
AMGT
ABUD
AFFAIRS
APER
AS
AMED
AY
AG
AR
AJ
AL
AID
AM
AODE
ABLD
AMG
AFIN
ATRN
AGAO
AFU
AN
AA
ALOW
APECO
ADM
ARF
ASEAN
APEC
AMBASSADOR
AO
ASUP
AZ
AADP
ACOA
ANET
AMCHAMS
ACABQ
ASECKFRDCVISKIRFPHUMSMIGEG
APCS
AGMT
AINF
AIT
AORL
ACS
AFSI
AFSN
ACBAQ
AFGHANISTAN
ADANA
ADPM
AX
ADCO
AECL
AMEX
ACAO
ASCH
AORG
AGR
AROC
ASIG
AND
ARM
AQ
ATFN
AC
AUC
ASEX
AER
AVERY
AGRICULTURE
BL
BR
BO
BA
BD
BM
BK
BG
BU
BB
BH
BTIO
BY
BEXP
BP
BE
BRUSSELS
BF
BIDEN
BT
BX
BC
BILAT
BN
BBSR
BTIU
BWC
BMGT
CA
CASC
CVIS
CM
CH
CO
CU
CD
CWC
CI
CS
CY
CMGT
CF
CG
CR
CB
CV
CW
CE
CBW
CT
CPAS
COUNTERTERRORISM
CJAN
CODEL
CIDA
CDG
CDC
CIA
CTR
CNARC
CSW
CN
CONS
CLINTON
COE
CROS
CARICOM
CONDOLEEZZA
COUNTER
CL
COM
CICTE
CIS
CFED
COUNTRY
CJUS
CBSA
CEUDA
CLMT
CAC
COPUOS
CIC
CBE
CHR
CTM
CVR
CITEL
CLEARANCE
CACS
CAN
CITT
CARSON
CACM
CDB
CAPC
CKGR
CBC
EC
EG
EPET
ECON
ETRD
EFIN
EIND
EMIN
ENRG
EAID
EAGR
EUN
ETTC
EAIR
ENIV
ES
EU
EINV
ELAB
ECIN
EFIS
ELTN
EWWT
ECPS
ECONOMIC
ENGR
EN
EINT
EPA
ELN
ESA
EZ
ER
ET
EFTA
EINVECONSENVCSJA
EUMEM
ETRA
EXTERNAL
EI
EUR
EK
ERNG
ENGY
ETRDEINVECINPGOVCS
ENERG
EINVEFIN
ENVR
ECA
ELECTIONS
ETC
EUREM
ENNP
EFINECONCS
EURN
ECINECONCS
EEPET
EXIM
ERD
ENVI
ETRC
ETRDEINVTINTCS
ETRO
EDU
ETRN
EAIG
ECONCS
ECONOMICS
EAP
ECONOMY
EINN
EIAR
EXBS
ECUN
EINDETRD
EREL
EUC
ESENV
ECONEFIN
ECIP
EFIM
EAIDS
ETRDECONWTOCS
EUNCH
EINVETC
IZ
IT
IR
IS
IN
IC
IAEA
IO
ICAO
IWC
ID
IV
ISRAEL
IAHRC
IQ
ICTR
IMF
IRS
IDP
IGAD
ICRC
ICTY
IMO
IL
INRA
INRO
ICJ
ITU
IBRD
INMARSAT
IIP
ITALY
IEFIN
IACI
ILO
INTELSAT
ILC
ITRA
IDA
INRB
IRC
INTERPOL
IA
IPR
IRAQI
ISRAELI
INTERNAL
ISLAMISTS
INDO
ITPHUM
ITPGOV
ITALIAN
IBET
INR
IEA
IZPREL
IRAJ
ITF
IF
KDEM
KU
KPAL
KNNP
KCRM
KZ
KN
KS
KJUS
KTFN
KSCA
KV
KISL
KPAO
KPKO
KIRF
KTIA
KIPR
KFLO
KFRD
KTIP
KAWC
KSUM
KCOM
KAID
KE
KTDB
KMDR
KOMC
KWBG
KDRG
KVPR
KTEX
KGIC
KWMN
KSCI
KCOR
KACT
KDDG
KHLS
KSAF
KFLU
KSEO
KMRS
KSPR
KOLY
KSEP
KVIR
KGHG
KIRC
KUNR
KIFR
KCIP
KMCA
KMPI
KBCT
KHSA
KICC
KIDE
KCRS
KMFO
KRVC
KRGY
KR
KAWK
KG
KFIN
KHIV
KBIO
KOCI
KBTR
KNEI
KPOA
KCFE
KPLS
KSTC
KHDP
KPRP
KCRCM
KLIG
KCFC
KTER
KREC
KTBT
KPRV
KSTH
KRIM
KRAD
KWAC
KWMM
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KOMS
KX
KMIG
KRCM
KVRP
KBTS
KPAONZ
KNUC
KNAR
KPWR
KNPP
KDEMAF
KNUP
KNNPMNUC
KERG
KGIT
KPAI
KTLA
KFSC
KCSY
KSAC
KTRD
KID
KOM
KMOC
KJUST
KGCC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KO
KNSD
KHUM
KSEC
KCMR
KCHG
KICA
KPIN
KESS
KDEV
KCGC
KWWMN
KPAK
KWNM
KWMNCS
KRFD
MOPS
MCAP
MPOS
MARR
MO
MNUC
MX
MASS
MG
MY
MU
ML
MR
MILITARY
MTCRE
MT
MEPP
MA
MDC
MP
MAR
MASSMNUC
MARAD
MAPP
MZ
MD
MI
MEETINGS
MK
MCC
MEPN
MRCRE
MAS
MIL
MASC
MC
MV
MTCR
MIK
MUCN
MEDIA
MERCOSUR
MW
MOPPS
MTS
MLS
MILI
MTRE
MEPI
MQADHAFI
MAPS
NO
NATO
NL
NP
NZ
NSF
NI
NH
NG
NAFTA
NU
NASA
NR
NATOPREL
NSSP
NSG
NA
NT
NW
NK
NPT
NPA
NATIONAL
NPG
NSFO
NS
NSC
NE
NGO
NDP
NIPP
NRR
NEW
NZUS
NC
NAR
NV
NORAD
OTRA
OPCW
OVIP
OAS
OREP
OPIC
OIIP
OPRC
ODIP
OEXC
OPDC
OSCE
OIC
OSCI
OECD
OFDP
OFDA
OMIG
OPAD
OFFICIALS
OVP
OIE
OHUM
OCS
OBSP
OTR
OSAC
ON
OCII
OES
PGOV
PREL
PHUM
PTER
PINS
PINR
PREF
PK
PROP
PA
PARM
PBTS
PMAR
PM
PGIV
PE
PRAM
PHUH
PHSA
PL
PNAT
PO
PLN
PAO
PSA
PHUMPGOV
PF
PEL
PBIO
POLITICS
PHUMBA
PAS
POL
PREO
PAHO
PMIL
POGOV
POV
PAK
PNR
PRL
PG
PREFA
PSI
PINL
PU
PARMS
PRGOV
PALESTINIAN
PAIGH
POLITICAL
PARTIES
POSTS
PROG
PORG
PTBS
PUNE
POLICY
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PP
PS
PY
PTERE
PGOF
PKFK
PSOE
PEPR
PPA
PINT
PRELP
PSEPC
PGOVE
PINF
PNG
PGOC
PFOR
PCUL
POLINT
PGGV
PHALANAGE
PARTY
PGOVLO
PHUS
PDEM
PECON
PROV
PHUMPREL
RS
RU
RELATIONS
RW
RO
RM
RP
ROOD
RICE
RUPREL
RSO
RCMP
REACTION
REPORT
REGION
RIGHTS
RF
RFE
RSP
RIGHTSPOLMIL
ROBERT
SU
SCUL
SNAR
SOCI
SF
SA
SHUM
SENV
SP
SR
SY
SANC
SC
SMIG
SZ
SARS
SW
SEVN
SO
SEN
SL
SNARCS
SNARN
SI
SG
SN
SH
SYR
SAARC
SPCE
SHI
SCRS
SENVKGHG
SYRIA
SWE
STEINBERG
SIPRS
ST
SNARIZ
SSA
SK
SPCVIS
SOFA
SIPDIS
SAN
TC
TI
TBIO
TH
TSPL
TRGY
TSPA
TPHY
TU
TW
TS
TAGS
TK
TX
TNGD
TZ
TF
TL
TV
TN
TD
TIP
TR
TP
TO
TT
TFIN
THPY
TERRORISM
TINT
TRSY
TURKEY
TBID
US
UK
UNGA
UP
UZ
UNMIK
USTR
UNO
UNSC
UN
UNESCO
UNAUS
UNHRC
UY
UG
UNHCR
UNCND
USOAS
USEU
UNICEF
UNEP
UV
UNPUOS
UNCSD
USUN
UNCHR
UNDC
USNC
UE
UNDP
UNC
USPS
USAID
UNVIE
UAE
UNFICYP
UNODC
UNCHS
UNIDROIT
UNDESCO
UNCHC
Browse by classification
Community resources
courage is contagious
Viewing cable 08LONDON3186, IRAQ PETROLEUM CONFERENCE 2008: DIALOGUE,
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08LONDON3186.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
08LONDON3186 | 2008-12-19 17:27 | 2011-02-04 21:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy London |
VZCZCXRO1087
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHLO #3186/01 3541727
ZNR UUUUU ZZH
R 191727Z DEC 08
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC 0749
INFO RUCNRAQ/IRAQ COLLECTIVE
UNCLAS SECTION 01 OF 03 LONDON 003186
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EPET EINV ECON IZ UK
SUBJECT: IRAQ PETROLEUM CONFERENCE 2008: DIALOGUE,
CAUTIOUS OPTIMISM ON OPPORTUNITIES IN IRAQ'S OIL SECTOR
¶1. (SBU) Summary. Iraq Petroleum 2008, held in London December 1-2, 2009, was a good opportunity for Iraqi officials, representatives from international companies, and participants from other governments to discuss the current situation in Iraq's petroleum sector, focusing particularly on investment opportunities. Presenters included a number of veterans of Iraq's oil sector, as well as outside experts from the petroleum industry and elsewhere. The speakers covered the strategic outlook for Iraq's petroleum sector, upstream and downstream investment prospects, the role of the international oil companies (IOCs) in Iraq's development, and the political, financial, and legal aspects of the petroleum sector. All speakers and participants agreed that IOC involvement is vital to building up Iraq's oil and gas sectors, and there was broad consensus that the GOI needs to find the right balance of state control and IOC risk/reward in future contracts to maximize the potential of Iraq's resources. The recent precipitous drop in world oil prices added urgency to calls for developing Iraq's petroleum sector. There was wide agreement that the time is right for progress on national hydrocarbons legislation and development of the oil and gas sectors, while acknowledging the difficulty of the tasks ahead. End summary.
Iraq's Petroleum Sector: Present and Future --------------------------------------------
¶2. (U) Many speakers noted that Iraq's petroleum sector is significantly underdeveloped, due largely to years of neglect and mismanagement through three wars and the sanctions period, as well as the departure of many qualified technocrats in 2003. Similarly, many mentioned declining production in the South as a significant impediment to Iraq's economic growth. Often in the same breath, however, many speakers pointed to the enormous potential of Iraq's petroleum sector, pointing to its 115 billion barrels of proven crude oil reserves - more according to Iraqi estimates - and 1.5 trillion cubic feet of natural gas reserves. One speaker said, "The market will take anything Iraq can produce." Another speaker observed that Iraq is uniquely placed as potentially the largest incremental crude oil producer in the world and should exploit that to the country's benefit. Advisor to the Prime Minister and former Oil Minister Thamir Ghadbhan and others pointed to the need for a national energy strategy, which would help Iraq comprehensively and rationally deal with its substantial resources. The GOI continues to tout six million barrels per day (MBPD) as the 10-year crude oil production target.
¶3. (U) The upstream and downstream development and investment opportunities in Iraq are significant, conference participants agreed. Not only are there opportunities for currently-producing oil and gas fields, some of which are super giants, but there is also significant exploration potential throughout Iraq. Speakers pointed to the recently-begun tender process for some of Iraq's oil and gas fields, as well as plans to offer more fields and exploration blocks in future tenders. Mustafa al-Jarrah of the Iraqi Ministry of Industry and Minerals noted that there are significant opportunities in petrochemicals too. Many noted, however, that the keys for additional development and investment are the legal and regulatory framework that the GOI chooses to implement, as well as the structure of the contracts offered by the GOI.
Iraq and the IOCs -----------------
¶4. (U) Much of the conference focused, in particular, on how much IOC and national oil company (NOC) involvement is needed in Iraq. Speakers and participants outlined the long history between Iraq and the IOCs, from pre-nationalization to post-2003 technical assistance, making it explicitly clear that Iraq's oil and gas resources belong to Iraq, and that Iraqis have no desire to be controlled by outsiders. That said, there was unanimous agreement that the IOCs offer technical expertise, technological advances, and financial resources that the Iraqis simply don't have in their domestic petroleum sector. Falah al-Khawaja, a former Director General at the State company for Oil Projects, argued that the global petroleum sector is very different now than it was in the 1970s, and that Iraq can now deal with major IOCs and NOCs from a position of strength. As such, the GOI needs to figure out the extent of its engagement with the IOCs, and how to present that engagement to the Iraqi people to avoid the impression that Iraq's oil sector is run by outsiders. Kjetil Tonstand of Statoil-Hydro argued that Iraq must determine how it will attract the right IOCs to develop Iraq's petroleum sector. Dr. Abdul Hadi al-Hassani, Vice Chairman of Parliament's Oil and Gas Committee, was a particularly strong advocate for greater leadership - LONDON 00003186 002 OF 003 particularly from the Iraqi Council of Representatives - in soliciting popular support, as well as an improved banking system, and more domestic and international transparency in the oil and gas sectors.
¶5. (U) Many of the IOC representatives expressed some indifference toward the conference, believing that it covered already well-trod ground. They were also unimpressed by the then-upcoming December 5-7 Energy Expo in Baghdad. There continues to be frustration among IOC representatives about how the GOI is handling its oil and gas contracts. IOC representatives argue that the contract structure brings a lot of risk with relatively little upside, and it remains to be seen how closely the GOI will hew to the announced schedule of the first contracting round.
Bring Back INOC ---------------
¶6. (U) Many speakers and participants lamented the current structure of Iraq's petroleum industry, which they see as too political and centrally-controlled by the Oil Ministry. One solution that received nearly unanimous backing was the reconstitution and increased role of the Iraqi National Oil Company (INOC). Many Iraqis in attendance spoke highly of INOC and its history of managing Iraq's oil sector, pointing to the nearly four mbpd in production reached at the end of the 1970s. The repeated argument was that INOC would mange the petroleum sector better than the Oil Ministry, and that the operating companies should come under INOC's umbrella. Dr. al-Hassani argued that the GOI must fund INOC properly to bring it to parity with IOCs. Fadhil Chalabi, former acting Secretary-General of OPEC and now with the Centre for Global Energy Studies, cautioned that INOC must remain apolitical and be run on a commercial basis, akin to other commercial state-owned oil companies like Statoil-Hydro or Petrobras.
The (Unpopular) Heads of Agreement with Shell ---------------------------------------------
¶7. (U) Participants express nearly unanimous concern about the recently-signed Heads of Agreement (HoA) on southern gas between the GOI and Royal Dutch Shell. Though the Iraqis present were content with the joint venture arrangement, others cited problems including a lack of transparency; the fact that HoA precludes the GOI from talking to other IOCs about gas in the coming year, thereby creating a monopoly; the HoA's review of export options when domestic concerns were a priority; and the fact that the HoA dictates that the joint venture must sell Iraqi gas domestically at international market rates.
Political, Financial, and Legal Ramifications ---------------------------------------------
¶8. (U) While noting the many political obstacles to the development of Iraq's petroleum sector, many of the Iraqis present indicated that the current political and economic situation may produce the right incentives for compromise on necessary hydrocarbons legislation. There was a great deal of optimism among many at the conference for Oil Minister Shahristani's late November visit to Erbil to discuss adding Kurdistan Regional Government (KRG)-produced crude oil to the Iraq-Turkey export pipeline. While many called the visit a breakthrough, Ghadbhan noted that the nature of the KRG's contracts and revenue sharing had not yet been discussed. Additionally, former Oil Minister Ibrahim Bahr al-Uloum was one of many who noted that there is currently a positive environment for agreement on hydrocarbon legislation. Some, including Dr. Al-Hassani, even mentioned passing a hydrocarbons framework law by spring 2009.
¶9. (U) Given the recent precipitous drop in world oil prices, many speakers noted the significant shift in the GOI's fiscal outlook. The GOI is likely to run a real deficit of USD 15-25 billion in 2009, and will have difficulty funding necessary capital investment projects beyond 2009, if oil prices remain around current levels, participants agreed. Dr. Colin Rowat of the University of Birmingham argued that this presents the GOI with an opportunity to assess current and capital expenditures based on rate of return, rather than simply providing money when it is requested, as was its general practice during the oil price boom. Ghadbhan noted that declining government revenue has only added on the pressure on the Oil Ministry to increase production.
¶10. (U) As many speakers reiterated, the Oil Ministry's efforts to increase production take place amidst legal and regulatory ambiguity over who controls the development, management, and revenues of Iraq's petroleum sector. All LONDON 00003186 003 OF 003 legal experts harkened back to Articles 111 and 112 of the 2005 Constitution and the legal ambiguity surrounding them. Dr. Carole Nakhle of the Surrey Energy Economics Centre and J. Jay Park of Macleod Dixon LLP discussed some of the GOI's legal options, including the structure of contracts and the constitutional issues involved. Nakhle urged the GOI to come up with a legal framework similar to that adopted for the North Sea, which would allow the government to maintain control over the resources but would also give companies maximum flexibility to develop Iraq's oil and gas fields. Interestingly, Dr. Al-Hassani pointed out that upstream (and some downstream) activities could be decentralized to the regions/provinces, although the legal questions still have to be answered.
Comment -------
¶11. (SBU) The conference demonstrated that the Iraqis are thinking seriously about the issues that face them, but it is unclear how much traction these ideas have among Oil Ministry leadership. It was somewhat encouraging to hear Iraqi participants speak so highly of IOC involvement and focus on development and involving the domestic Iraqi private sector in the petroleum sector, although they were unable to provide many specifics ways to solve their problems. Even in the face of some optimism that contract tenders have been offered and that the apparent thaw in GOI-KRG relations can bring about national hydrocarbons legislation, the mood at the conference was somewhat subdued, with many participants acknowledging that the GOI continues to face many of the same issues it has for quite some time. Visit London's Classified Website: XXXXXXXXXXXX
TUTTLE