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.