Iraq and the Politics of Oil

An Insider's Perspective

Gary Vogler

• Publisher: University Press of Kansas
• Year: 2017
• Print ISBN: 9780700625062, 9780700625062
• eBook ISBN: 9780700625079
• Topic: History
• Subtopic: Military & Maritime History
• Index: History

Was the Iraq war really about oil? As a senior oil advisor for the Office for Reconstruction and Humanitarian Assistance (ORHA) and briefly as minister of oil, Gary Vogler thought he knew. But while doing research for a book about his experience in Iraq, Vogler discovered that what he knew was not the whole story—or even the true story. The Iraq war did have an oil agenda underlying it, one that Vogler had previously denied. This book is his attempt to set the record straight.

Iraq and the Politics of Oil is a fascinating behind-the-scenes account of the role of the US government in the Iraqi oil sector since 2003. Vogler describes the prewar oil planning and the important decisions made during hostilities to get Iraqi oil flowing several months ahead of schedule. He reveals how, amid the instability of 2006 (largely fueled by the arrogance of early US decisions), the fixing of the Bayji Refinery contributed significantly to the success of the oil sector in the Sunni part of northern Iraq during and after the surge. Vogler gives us an expert insider’s view of the largest oilfield auctions in the history of the international oil industry, and his account shows how US Forces’ focus on a single Iraqi point of failure in 2007 was a primary factor in the record productions and exports of 2012 through 2017.

But under the successes so deftly chronicled here, a darker political narrative finally emerges, one that reaches back to the decision to go to war with Iraq. Uncovering it, Vogler revises our understanding of what we were doing in Iraq, even as he gives us a critical, close-up view of that fraught enterprise.

CHAPTER 1

American Oil Minister

Who’s going to fill the top job?

—Dr. Radhwan Al Saadi

It was April 27, 2003, my third day in Baghdad as part of the initial civilian element that entered Iraq under retired Lieutenant General Jay Garner and the DOD Office for Reconstruction and Humanitarian Assistance (ORHA). Eighteen senior advisors for the various ministries, including me, had arrived in Baghdad from Kuwait on April 24 aboard a C-130 air force transport plane. The other advisors were active and retired ambassadors or other experts in their fields and were assigned as senior advisors to Iraq’s ministries. My responsibility was the oil sector, and I was assigned to be the senior oil advisor to General Garner.

Army Civil Affairs Colonel Joe “Bob” Schroeder, USAR, accompanied me in a Humvee to a meeting at the Baghdad Civic Center. The meeting was arranged by my contact at the National Security Council (NSC) of the White House. Colonel Schroeder was assigned to the 352nd Civil Affairs Command, and his mission was to assist the ORHA oil team. Schroeder and his folks were invaluable, especially during my first couple of weeks in Baghdad.

“Gary, do you think these three Iraqis that we’re meeting today were some of those that we saw yesterday at the ministry?” Bob asked. Bob and I had met several Iraqis during our first visit to the oil ministry complex the previous day. Bob had taken me to the ministry to initiate contact with Iraqis and meet the US military commander in the area.

My NSC contact phoned me the previous night on my satellite phone. She gave me three Iraqi names for today’s meeting. “Bob, Pam Quanrud at the NSC mentioned that these three gentlemen are considered the best oilmen in the ministry. So, I suspect they were among the dozen or so that we met yesterday.”

The Baghdad Civic Center was a large complex that became the meeting place for much activity and eventually the home for Iraq’s parliament. It was located inside the Green Zone and about a mile from Saddam’s Presidential Palace, the current ORHA headquarters. Electricity had not been restored since the beginning of the war a few weeks prior, but the sun was shining and there was plenty of light inside the building. Bob and I quickly moved up the stairs to the second floor toward a small meeting room outside of one of the main auditoriums. As we approached the room, I recognized the three distinguished-looking Iraqi gentleman from the previous day at the oil ministry. A US civilian accompanied them.

Introductions were quickly made and the five of us moved into the small room. The US civilian did not stay. The three Iraqis were Dr. Radhwan Al Saadi (director general of Finance and Economics Directorate), Dr. Faleh Al Khayat (director general of the Technical Directorate), and Mr. Thamir Ghadhban (director general of the Planning Directorate). All were principal directorates within the headquarters of the Ministry of Oil in Baghdad. All three had received their advanced education in the United Kingdom, spoke fluent English, and had at least thirty years of uninterrupted service in the Iraqi oil industry inside of Iraq. Radhwan had struggled to get the other two gentlemen to accompany him to the meeting.

As a twenty-one-year veteran of Mobil Oil and ExxonMobil training, my first item on the agenda was safety. The safety discussion was substantially different from any that I had experienced at ExxonMobil. We discussed the immediate safety of their families and any specific threats to them, especially for meeting with me. The Iraqis were anxious about meeting me privately in the Civic Center because they did not want to be perceived as cooperating with the American occupiers. Many Iraqis considered us occupiers and not liberators, as we were led to believe by our Washington leadership. These gentlemen recognized the importance of making this early private contact. They knew that several of their colleagues in southern Iraq had met with me earlier in April.

The next point on the agenda was the clarification of the US oil sector mission. “Contrary to what you might be reading in the press, we are not here to steal Iraq’s oil. Your oil belongs to the Iraqi people,” I explained. “The US and my mission is to quickly return Iraq’s oil sector to producing at the same level before hostilities started, to repair and restore to prewar levels.” And I added with a smile, “So that I can quickly return to my family in the US.” This last comment would elude me for several years. April 2003 was my first of seventy-five months in Iraq over the following nine years.

The three Iraqis acknowledged my comments and agreed that we all had a common objective, to get the oil flowing again. “We need to minimize the negative impact to the Iraqi people,” said Thamir Ghadhban. “Shortages of cooking and transportation fuels will add to their suffering. Iraqis have already suffered too many shortages in the past under the former regime.” Al Saadi and Al Khayat agreed.

“Good, we are in agreement that it is in everyone’s interest to get the oil flowing,” I said. “Now, what do you recommend I do to help you accomplish the goal?” All three immediately responded that a leadership team must be appointed as soon as possible.

“Until appointments are made, no one knows who is in charge at the ministry,” said Dr. Radhwan.

Having sensed that this would be an important agenda item, I reached into my case and pulled out a one-page document that had been provided to me before my departure from DC (see Figure 1.1). It was the organizational structure of the Ministry of Oil, including the names of the individuals in the top twenty-five jobs prior to hostilities. The chart included all the oil ministry directorates in Baghdad as well as the operating companies located throughout the country. It was organized under three deputy ministers: upstream, midstream, and downstream. We focused on all the jobs except for the minister position and the three deputies.

“So, I understand that we need to appoint all of the key leaders designated on this organizational chart. Do you agree?” I asked.

All three Iraqis looked surprised at what was in my hand. “Where did you get that document?” said Dr. Faleh.

“It is not important where I got this, but if I understand you correctly, ORHA needs to appoint Iraqis to these top twenty-five leadership positions within the Ministry of Oil, as soon as possible.”

“Yes, that is what we need,” said Ghadhban.

“OK, let’s get started,” I said.

Dr. Faleh proposed three principles before we started evaluating candidates for jobs. “There should be no collective punishments, there should be no retroactive application of new rules, and there should be no guilt by association.” He was apparently concerned about possible bias against oil officials who worked under the previous regime and members of the Baath Party. We all agreed, but I interjected that the one exception was involvement with weapons of mass destruction (WMD). I warned that WMD was the one issue where there would be no tolerance. The three Iraqis mentioned that WMD was something that did not involve the oil ministry.

There were no objections, so the five of us spent the next two hours going through each position and discussing the appropriate Iraqi for the job. It was a good discussion, highlighting important skillsets required for specific positions. I was working with professional oil executives, not unlike my colleagues in the global oil industry. Many questions were asked and answered before we settled on a specific appointee for a job. Is he technically competent? What is his educational background? Has he demonstrated leadership skills? How?

Many of the appointees were incumbents and those were easy decisions. A few appointees were designated as temporary or deputy director general when it became obvious that no consensus could be reached. Most noteworthy was the appointee for director general of the State Oil Marketing Organization (SOMO). It was one of the smallest groups, but one of the most important. SOMO consisted of about 150 people; most were highly educated and experts in their field. They were responsible for marketing all oil exports from Iraq and had developed an excellent reputation throughout the Middle East oil industry. We decided to temporarily appoint the previous deputy director general.

Fig. 1.1 Oil Ministry Organization Chart, March 2003

The Iraqi Tanker Company director was the last appointee.

We agreed to have a meeting on May 3 with the entire leadership team. Formal appointment orders signed by the appropriate ORHA official would be issued for that meeting. The formal meeting would be followed by a public announcement and discussion with the press.

As we stood to leave, Dr. Radhwan turned to me and asked, “Who’s going to fill the top job?”

We had discussed all the directors general positions, but we had not mentioned who would be the oil minister, the most important position. The NSC back in DC would make this decision. I would provide input, but the final decision was not mine. So, I decided to get input from the three Iraqis.

“Who do you think should fill that job?” I asked.

Radhwan said he thought it should be an Iraqi who had suffered hardships under the Saddam regime during the previous decades and not an Iraqi expat who had escaped from Iraq years before.

“I will share your recommendation with the people making that decision,” I said.

We had all started to walk out of the meeting room when Dr. Radhwan stopped and turned to me, “Gary, until you appoint someone, you are the minister of oil, right?”

He was right. Garner had mentioned that all of his ministerial senior advisors were ministers until an Iraqi was appointed. However, there was something about hearing it come from Dr. Radhwan that made it sound so much more official.

“That’s why the appointment will be done quickly. We will have a name by the formal meeting on May 3,” I replied.

Dr. Radhwan’s comment truly caught my attention. My first thoughts were guarded, almost paranoid. I had just had a telephone conversation with my NSC contact a week prior in Kuwait. Folks in the NSC were irritated about press clippings of US Army general officers quoted as taking credit for early accomplishments in the oil sector. Our orders were to always keep an Iraqi face on anything pertaining to the oil sector. How was I supposed to keep my face out of the press as the American oil minister?

My concerns faded later that evening while cleaning up some of the dirt in my palace bedroom before calling it a day. The room was large enough for about ten army cots and would eventually house five more ORHA oil advisors in another week, but I was the only inhabitant for now.

The windows throughout the palace had been shattered during the “shock and awe” bombing campaign, the massive US air force bombing of Baghdad in the first few days of hostilities. The dust storm that hit most of Iraq the night before had deposited a layer of dirt everywhere. The same storm woke me up at midnight; I was coughing because the dust was so thick that I could not breathe. I grabbed a towel from my duffle bag to filter my air and went back to sleep.

Creature comforts were nonexistent. Meals ready-to-eat (MREs) and bottled water were our nourishment. We had no electricity, no running water, and no indoor bathroom facilities. It did not seem like a palace at the time.

After cleaning things up, I reclined on my army cot and reflected on my new title, “Your Excellency, the Minister of Oil.” The title had a nice sound to it—delusions of grandeur, a temporary escape from reality! My new portfolio had proven oil reserves of more than 112 billion barrels; ExxonMobil’s oil and gas equivalent reserves were only about twenty billion barrels.

How did I get myself here? What did I do wrong, or right? A kid from East Wheeling, a neighborhood of Wheeling, West Virginia, known for steel mills and coal mines.

I was raised in an Irish-German Catholic family with two brothers and a sister, and religion and sports molded my early life. My father, Henry “Bud” Vogler, was a navy pilot during World War II. He joined the navy a year after graduating from high school and was placed into the navy aviator cadet program. The navy sent him to college for a couple of years and then through flight school. The war ended just as he graduated from flight school, so he left the navy to return to Wheeling and marry his high school sweetheart.

My mother, Margaret Ellen George, was the eldest of six children. Her father fought in World War I with the 42nd Infantry under a very capable military leader, Brigadier General Douglas MacArthur. My grand...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• List of Illustrations
• Preface
• Acknowledgments
• List of Abbreviations
• Dramatis Personae
• 1. American Oil Minister
• 2. Contingency Planning for the Oil Sector
• 3. ORHA Start-Up: Lieutenant General Jay Garner Is the First Civilian Leader
• 4. Iraqi Oil Sector: History, Resources, and Organization
• 5. Adjusting the Oil Plan
• 6. Penalizing Syria: Why So Important?
• 7. Finding Gold in Baghdad: Oil Ministry Leadership
• 8. The Calm before the Storm: June 2003
• 9. The Long Hot Summer of 2003
• 10. The Bizarre Top Priority
• 11. Task Force Shield: Securing the Oil Sector
• 12. Changing of the Guard: Oil Ministry and CPA Oil Changes
• 13. CPA Closes Out: June 2004
• 14. A Break between Tours: 2004 to 2006
• 15. Energy Fusion Cell: Fixing the Oil Sector
• 16. The Bayji Refinery and the Surge
• 17. The Southern Export Project
• 18. The Bid Rounds: Oil Field Auctions
• 19. Leaving Iraq: September 2011
• 20. What Haunts Me
• Epilogue
• Notes
• Bibliography
• Index
• Photo Gallery
• Back Cover