Thursday, November 12, 2009

Oil company drafting Iraqi Constitution speechless

“The idea that an oil company was participating in the drafting of the Iraqi Constitution leaves me speechless,” said Feisal Amin al-Istrabadi, a principal drafter of the law that governed Iraq after the United States ceded control to an Iraqi government on June 28, 2004.

In effect, he said, the company “has a representative in the room, drafting.”

DNO’s chief executive, Helge Eide, confirmed that Peter Galbraith helped negotiate the Tawke deal and advised the company during 2005. But Mr. Eide said that Mr. Galbraith acted solely as a political adviser and that the company never discussed the Constitution negotiations with him. “We certainly never did give any input, language or suggestions on the Constitution,” Mr. Eide said.

Mr. Galbraith did work as a mediator between DNO and the Kurdish government until the oil contract was signed in the spring of 2004, and maintained an “ongoing business relationship” with the company throughout the constitutional negotiations in 2005 and later.

Galbraith recently was in the news after being fired from his post at the U.N. mission in Afghanistan because, Galbraith says, he had strongly warned about the possibility of fraud and corruption before Afghanistan's ill-fated presidential election in August.

The reply from Hawrami, also dated Oct. 5, called the issues arising from the regulatory probe "unfortunate internal disagreements" with the Oslo Stock Exchange, which "were exploited by the media beyond DNO's control."

That scandal is taking place in Norway, where Galbraith, the son of famed Harvard economist John Kenneth Galbraith, lives in Bergen with his Norwegian wife.

Norway's largest financial newspaper, the "Dagens Naeringsliv," reported last week that Galbraith acquired a 5 percent share in an oil field in the Iraqi Kurdish region at a time when he was a leading voice in the U.S. debate over the structure of post-Saddam Iraq.

At the time, the former diplomat urged in meetings with U.S. officials and in articles in the "New York Review of Books" that the Kurds should be given maximum autonomy.

And he helped draft Iraq’s 2005 constitution by advising Kurdish leaders on legal language they should seek to insert into it -- including keeping future oil development in their region under their own control.

In the lead-up to the Iraq war, Galbraith worked as an adviser to then-U.S. Deputy Defense Secretary Paul Wolfowitz. Galbraith then left government service and in late 2003 and early 2004 worked as a paid consultant to Kurdish politicians. Later, in 2005, he advised them again on an unpaid basis.

Oslo-based DNO was the first independent Western oil company to secure an oil deal in post-Saddam Iraq, signing a production sharing contract with the Kurds in June 2004 to develop the Tawke field. DNO also has stakes in two other oil fields in the region, which are both still at the exploration level.