Iraq Oil Report

Plus:
*KBR, owner of 2002 rebuild Iraq oil deal, shirks patriotic duty to pay taxes
*Gulf Keystone, partners, start KRG seismic
*Women’s Day in Iraq
*Iraq’s Three Civil Wars
*Iraq assessment to be kept private
*U.S. Ambassador to Iraq Crocker to resign

The head of the Senate Armed Services Committee wants U.S. auditors to investigate the Iraqi government’s spending on reconstruction as both U.S. and Iraqi funds in the rebuilding effort came under fire on Capitol Hill this week, Ben Lando reports for United Press International.

“How much has Iraq and the United States, respectively, spent annually during that time period on training, equipping and supporting Iraqi security forces, and on Iraq reconstruction, governance, and economic development?” Committee Chairman Carl Levin, D-Mich., and member John Warner, R-Va., wrote Friday to the U.S. Government Accountability Office. “We believe that it has been overwhelmingly U.S. taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq earning billions of dollars in oil revenue over that time period that have ended up in non-Iraqi banks.”

The Pentagon’s head of U.S. Central Command and the State Department’s Iraq coordinator were grilled by members of Congress this week who took the decidedly “blame Iraq” tone — not wholly unwarranted, some say — in expressing frustration with progress in the country five years after the invasion.

The reconstruction is to repair damage caused by the 2003 invasion and resulting war, as well as rebuilding Iraq from harm caused by Saddam Hussein. The funds not in Iraq are in the United States. ….

To read the entire story, click HERE.

The entire letter from Sens. Levin and Warner is at the end of today’s Iraq Oil Report.

Kellogg Brown & Root, the nation’s top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven, Farah Stockman reports for The Boston Globe.

More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands. …

With an estimated $16 billion in contracts, KBR is by far the largest contractor in Iraq, with eight times the work of its nearest competitor. The no-bid contract it received in 2002 to rebuild Iraq’s oil infrastructure and a multibillion-dollar contract to provide support services to troops have long drawn scrutiny because Vice President Dick Cheney was Halliburton’s chief executive from 1995 until he joined the Republican ticket with President Bush in 2000. …

Then, in 2002, the firm received a secret contract to draw up plans to restore Iraq’s oil production after the US-led invasion of Iraq. The Defense Department has said the firm was chosen mainly for its assets and expertise, not its ability to control costs.

Andrew G. Marshall writes for The Center for Research on Globalization a decidedly anti-KBR but detailed nonetheless account of the firm’s role in global strife situations.

Gulf Keystone has started seismic testing in its Iraqi Kurdistan exploration block, the company said in a statement. Gulf Keystone Petroleum International Limited has partnered with Kalegran Ltd, a subsidiary of MOL Hungarian Oil and Gas Public Limited Company and Texas Keystone Inc. on the project.

Iraq, where women once had more rights and freedom than most others in the Arab world, has turned deadly for women who dream of education and a professional career, Dahr Jamail writes for Inter Press Service. Former dictator Saddam Hussein maintained a relatively secular society, where it was common for women to take up jobs as professors, doctors and government officials. In today’s Iraq, women are being killed by militia groups for not conforming to strict Islamist ways.

For the war widows who have moved to the outskirts of Baghdad from all over the country to try to eke out a living, each day is a struggle for survival. “A lot of these women are young - they are not the ‘old ladies’ we’d imagine as widows, as we did in the past,” says one such woman, Suhair, Reuters reports in their series Heroines – The daily life of Iraq’s war widows. Eighty-two percent of the 2.4 million people displaced inside Iraq are women and young children under the age of 12. Many mothers have lost their husbands in the sectarian violence that has torn the nation apart. But in the face of adversity, they are proving to be true heroines. These stories, collected by women’s organisations in Iraq ahead of International Women’s Day on March 8, give a rare insight into how Iraqi widows are helping their families survive while retaining their dignity in times of extreme suffering.

A new National Intelligence Estimate on Iraq is scheduled to be completed this month, according to U.S. intelligence officials, Walter Pincus and Karen DeYoung report for The Washington Post. But leaders of the intelligence community have not decided whether to make its key judgments public, a step that caused an uproar when key judgments in an NIE about Iran were released in November.

Iraq’s Three Civil Wars, by Juan Cole for the MIT Center for International Studies. There’s a war for Basra in the deep south. … Then, there’s a war for Baghdad. … And finally, as if all that weren’t all enough, there is a war in the north for control of Kirkuk.

Turkey rejected a request by Iraqi Kurds to shut down military bases in semi-autonomous Kurdistan region in ‘northern Iraq’, Vatan newspaper reported citing a statement by the Turkish army, Agence France-Presse reports. Turkey won’t withdraw about 2,000 soldiers stationed at the bases in the regions of Bamerni, Batufa, Kanimasi and Dilmentepe until the threat to Turkey’s security posed by Turkey’s Kurdish PKK militants is eradicated, the army said, according to the Istanbul-based Vatan.

Recent statements by U.S. military officials have revived Turkish suspicions about Washington’s true intentions toward the Kurdistan Workers’ Party (PKK), which has been waging a nearly 24 year-old insurgency for greater rights for Turkey’s Kurdish minority, Gareth Jenkins reports for The Jamestown Foundation’s Eurasia Daily Monitor. Although the PKK is included on both the State Department’s and the EU lists of proscribed terrorist organizations, most Turks believe that the United States and Europe are at least sympathetic to the PKK and probably actively supporting the organization.

War-torn Iraq might seem an unlikely place for a small Yardley company to do business, Linda Loyd reports for The Philadelphia Inquirer. Yet, entrepreneur Stephen DeAngelis’ venture, Enterra Solutions L.L.C., a management-consulting and software firm, has a technology that the Pentagon and the Kurdish regional government in northern Iraq say they believe could help revitalize the Iraqi economy, assist once-idle factories to sell their goods, and attract foreign investment. Enterra, which also is doing work for the operator of the Port of Philadelphia, has a $23 million, three-year contract with the Kurdistan Regional Government to create and operate a business-development center in Erbil, Iraq, where foreign investors can come to invest in critical infrastructure industries - banking, telecommunications, agriculture, chemicals, energy and utilities.

In January 2007, President Bush announced that the U.S. would double the number of Provincial Reconstruction Teams (PRTs) in Iraq as part of his plan for a “New Way Forward.” Read the report by Robert Perito of the U.S. Institute of Peace.

U.S. Ambassador to Iraq Ryan C. Crocker is expected to depart from Baghdad in January 2009, soon after the head U.S. military commander plans to leave Iraq, UPI reports.

U.S. soldiers repeatedly deployed to Iraq are at greater risk of having mental health issues, a military study revealed, UPI reports.

Is the rising Dinar an attractive investment? Antoine Blua asks in Radio Free Europe/Radio Liberty. “Every dinar you buy represents a share in Iraq’s bright new future.” That’s how one website selling Iraqi dinars tries to convince potential investors to acquire the currency.

The Honorable David M. Walker
Comptroller General of the United States
441 G. Street, NW
Washington, DC 20548

Dear Mr. Walker:
Nearly five years ago, on March 27, 2003, then Deputy Secretary of Defense Paul Wolfowitz, in testimony before the Defense Subcommittee of the House Appropriations Committee, was asked whom he expected would pay for the rebuilding of Iraq. He answered that “there’s a lot of money to pay for this. It doesn’t have to be U.S. taxpayer money. And it starts with the assets of the Iraqi people …the oil revenues of that county could bring between 50 and 100 billion dollars over the course of the next two or three years…. We are dealing with a country that can really finance its own reconstruction and relatively soon.”

In fact, we believe that it has been overwhelmingly U.S. taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq earning billions of dollars in oil revenue over that time period that have ended up in non-Iraqi banks. At the same time, our conversations with both Iraqis and Americans during our frequent visits to Iraq, as well as official government and unofficial media reports, have convinced us that the Iraqi Government is not doing nearly enough to provide essential services and improve the quality of life of its citizens.

According to the U.S. Department of State’s Iraq Weekly Status Report for February 27, 2008, the Iraq Oil Ministry goal for 2008 is to produce 2.2 million barrels per day (MBPD). To date through the 24th of February, the 2008 weekly averages have ranged from a low of 2.1 MBPD to a high of 2.51 MBPD, missing that goal for one week only. Exports are over 1.9 MBPD, with revenues estimated at $41.0 billion in 2007 and $9.4 billion in 2008 year to date.

Extrapolating the $9.4 billion of oil revenues for the first two months of 2008 yields an estimate of $56.4 billion for all of 2008. And that figure will probably be low given the predictions for oil prices to continue to rise over the coming year. In essence, we believe that Iraq will accrue at least $100.0 billion in oil revenues in 2007 and 2008.

We request you look into this matter and provide answers to the following questions:

• What are the estimated Iraqi oil revenues each year from 2003-2007?
• How much has Iraq and the United States, respectively, spent annually during that time period on training, equipping and supporting Iraqi security forces, and on Iraq reconstruction, governance, and economic development?
• What are the projections for oil revenue and spending for 2008?
• What is the estimate of the total Iraqi oil revenue that has accumulated unspent from 2003-2007, and the expected estimate at the end of 2008?
• How much money does the Iraqi Government have deposited, in which banks, and in what countries?
• Why has the Iraqi Government not spent more of its oil revenue on reconstruction, economic development and providing essential services for the Iraqi people?

Your assistance in this matter would be appreciated.

Sincerely,

John Warner Carl Levin
Member Chairman

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