Final SIGIR report is deficient
Gary Vogler, former senior oil consultant to US Forces Iraq, writes:
Sunday, 17 March marked the 10th anniversary of the Jay Garner-led ORHA team departure from the Pentagon to Kuwait, and then onto Baghdad. As Jay’s Oil Advisor, I was part of that initial group that met at the Pentagon parking lot on a Sunday morning for the flight to Kuwait. Little did I know that my home for 75 months over the next nine years would be in Iraq working on oil sector reconstruction.
The Special Inspector General for Iraq’s (SIGIR) final report, recently released, left a lot to be desired in terms of contemporary truths and lessons learned. Our experience and success in the oil sector was a lot better than he and his report portrayed.
As a member of the initial team of oil advisors in Iraq, I witnessed that the US Army’s Corps of Engineers partnered with the Iraqis to start Iraq’s oil flowing on April 23, 2003 in the important Rumaila oil field, several months ahead of pre-war plans and 14 days after the fall of Baghdad.
This momentum was maintained until the US Forces departed in 2011. Iraq’s oil has never stopped flowing and Iraq’s total oil revenues are approaching the $450 billion level since 2003 with projections to pass the $1 trillion mark by the end of 2016.
2012 oil revenues represent a 1200% increase over 2003 revenues-almost three times more than Apple Computer’s stock growth over the same time. Iraq’s production eclipsed the 3 million barrel a day level last summer for the first time since 1979.
Recently opened new export facilities in southern Iraq are currently operating at half capacity, but still ship about 0.9 million barrels a day. This equates to $36 billion a year of revenues at current prices and will increase to over $70 billion when phase 1 reaches the design’s full capacity of 1.8 million barrels per day. Phase 2 of the project is designed to add another 1.8 million barrels a day within the next 2 years. Just for a volumes comparison, ExxonMobil’s global oil liquids production in 2011 averaged 2.3 million barrels a day.
At the start up ceremony last year, Oil Minister Luaibi identified the project as not only the most important oil project, but also the most important infrastructure project completed in decades. I agree – international oil executives told me that they knew of no other single oil project that will impact global oil supply more over the next ten years.
Most importantly, the SIGIR report misses the fact that the US military and civilian oil advisors under the leadership of Americans like Generals Petraeus, Odierno and Austin were able to leverage the last $2 million of US oil reconstruction funds, in partnership with the Iraqis, to seed the construct of this multi-billion dollar export facility. Iraqi oil revenues have paid for the rest.
The project started in early 2007, just after General Petraeus took command of Multi National Forces Iraq. It quickly became one of the military’s top priority infrastructure projects, scheduled for recurring detailed briefs to the Commanding General until the 2011 departure of US Forces. This high level American military leadership focus was the key push and sometimes the only push behind the project. A reliable export channel for Iraq’s oil was appropriately considered an Iraqi national security issue by our military.
SIGIR touts their final report – “Learning From Iraq provides the most comprehensive picture of the reconstruction program yet produced”. From the perspective of the oil sector reconstruction effort, the SIGIR report is deficient. It fails to even discuss the US military’s contribution to Iraq’s most important infrastructure project in decades. The following US military units played significant roles: Corps of Engineers Gulf Region Division, Coalition Navy, Energy Fusion Cell, Civil Affairs Cmd, US Division South and the US Forces J9 Staff.
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I worked with Gary in Iraq,been with SIGIR on several inspections and read many of thier reports. This article is on-target! To add my opinion to Gary’s peice, a SIGIR report often misses the 2nd & 3rd order affects of our work in Iraq; the network and the trust that was built at the mid-level leadership ranks between Iraqi ministry people and all US Forces. Those relationship will be our best legacy to Iraq. Yes, some of our projects cost a lot of money. They also employed many Iraqis that did not join up against us and planted IEDs in the middle of the night.
The Latin word-of-the-day Transparent Language kindly sent this morning was “Malum quidem nullum est sine aliquo bono” – there is no evil without something good. So, at least there’s the increase in oil production for Iraq.
On the 1200% increase in revenues, though, surely simply ending the embargo on Iraqi oil played some role?
I didn’t see the SIGIR report and don’t know what is written there, but I was a senior engineer at ministry of oil/planning and studies directorate in 2003 and had a lot of meetings with Gary and his oil cell and think they helped a lot and did great job there, from Feb.2007-Aug.2010 I was the D.G of NRC the biggest refining Co. in Iraq,the company was collapsed and controlled by terrorists,the production increased from 25% up to 85% and the situation quickly became stable and I can say with full confidence with out the help U.S army,personally the generals like Petraeus, Odierno,Mixon,Austin and many others who all had visited me at Baiji, and oil advisors personally Gary,Kevin Ross and many others, without their help I would not be able to do any thing.
Gary comments had concetrated on the upstream section of the oil industry and I donot blame him nor others in doing so but as the general manager of MRC the most important objective after the 9th of April 2003 was to provide products to the people by starting the refineries . At the time everybody Iraqies or Americans put refineries as a second or even third priority accept Gary who with some help from few recognized the importance of running refineries so that the people can get their needs and also to start up power stations to supply electricity and that was the only way to normalize the country as a whole and one can ask General Hawkins about the effect of Daura refinery to achieve normalization in Baghdad after we operated Daura refinery . I have not been able to read the SIGIR report I hope that Gary send me and Dr Ali a copy or at least a breifing of it but surely Gary personally was the main force behind Iraqi refineries commisioning hence the main factor in street stabilization .
In response to Dathar’s comments, I would add, that I was the ORHA/CPA representative to the South Oil Company. I was seconded from CFLC/352d CA CMD to ORHA and worked directly for Gary. My job was to facilitate standing up the Iraq South Oil Company. Gary fully supported everything I asked of him as we got the refinery going and as very limted amount of the oil flowing in the South. ORHA(CPA), The Army Corps of Engineers, and the KBR support folks worked very well together to pull all manner of rabbits from the hat to get the power and water going, which required the refinery to be operating so that the wells could flow, so that the dissolved gas (vs available dry gas) could be produced with the oil, so that the generators could generate electricity and the public water supply could begin to pump again… and on and on,etc. Parallel to this we were repairing High Voltage power lines and having to import splices from the UK to do it. The fuel for automobiles and cooking and heating were secondary but very necessary benefits of the refinery starting. The refinery was hobbled due to some CFLC idiot dropping an explosive on the Hamden Junction of the export pipeline and killing two valves that could not be replaced within several months. (I have a photo you would not believe). The refinery had only so much storage and without an export pipeline, all they produced in excess of local requirements had no place to go. It was insane… but fun to make a difference every day. At any rate, the SIGR was very un-objective with their treatment of the Oil Group. RBH, COL(Ret), CA, USA