Saturday, September 15, 2007

Bush Pal Gets Kurdish Oil Deal

By Cernig

I missed this one at the time, but back on the 8th of this month, the AP reported that a Texas-based oil firm had done a deal with the Kurdistan region of Iraq for a "production-sharing contract for petroleum exploration".

A Hunt subsidiary, Hunt Oil Co. of the Kurdistan Region, will begin geological survey and seismic work by the end of this year and hopes to drill an exploration well in 2008, the parties said in a news release. Terms of the deal were not disclosed.

Hunt is a privately held independent oil company based in Dallas. A third partner, Impulse Energy Corp., also has a stake in the project.

"We're very pleased to have the opportunity to be a part of these landmark events by actively participating in the establishment of the petroleum industry," Ray L. Hunt, Hunt's CEO, said in a statement.

Revenue will be shared by the KRG throughout Iraq, consistent with the Iraq constitution and the Kurds' new petroleum law, issued by the Kurdistan National Assembly early last month.

Despite Iraq's vast oil reserves, major international companies have sat on the sidelines, not only for security reasons but because of the absence of legislation governing the industry and offering protection for investments.

A draft oil law for all of Iraq has been bogged down for months, in part because of disputes over who will control the proceeds.

In August, however, the Kurdish self-governing region in northern Iraq enacted its own law governing foreign oil investments. The move angered the central government in Baghdad, but the Kurds are determined to push ahead with oil exploration.
The deal with Hunt Oil is the first such agreement since the Kurds passed their bill.

But here's what will raise eyebrows: the CEO of the company in question, Ray L. Hunt, is a close associate of both Bush and Cheney.
Hunt now serves as Chairman of the Board, President, and CEO of Hunt Consolidated, Inc.; Chairman of the Board and CEO of Hunt Oil Company; and Chairman of the Board, Chief Executive Officer and President, RRH Corporation. He has been Chairman and Chief Executive Officer of Hunt Private Equity Group since its inception in 1990. [2]

Hunt was appointed in October 2001 by President George Walker Bush to the President's Foreign Intelligence Advisory Board.[3]

Hunt joined the Halliburton Company Board in 1998. He is Chairman of the Compensation Committee and member of the Audit and the Management Oversight Committees. He also serves as a member of the boards of directors of PepsiCo, Inc., King Ranch, Inc., Electronic Data Systems Corporation, the Federal Reserve Bank of Dallas, and Security Capital Group Incorporated.[4][5] [6]

Hunt currently serves as a Member of the Board of Trustees of the Center for Strategic and International Studies in Washington, D.C.; the Board of Trustess for the George Bush Presidential Library Foundation; the Board of Advisors for the Maguire Energy Institute at SMU Cox School of Business; the Board of Directors of the Texas Research League; the executive committee of the Southwestern Medical Foundation in Dallas; and the Board of Trustees of Southern Methodist University.[7]

Hunt has served as chairman of the National Petroleum Council in Washington, D.C. (an industry advisory organization for the Secretary of Energy) and served as its chairman from June 1991 to July 1994.
So a company that is headed by someone who was certainly a member of Cheney's infamous energy task-force, sits on the boards of Halliburton and Dubya's library and is on Dubya's team of foreign advisors gets the very first oil contract out of Kurdistan after they pass a law which makes privatized foreign ownership of Iraq's oil easier.

Tell me again that it wasn't at least partly about oil.

Today, at Times Select, Paul Krugman argued that the Hunt Oil CEO is "effectively betting against the survival of Iraq as a nation,". Via Raw Story:
Hunt raised about $100,000 for Bush during the president's 2000 campaign, and he serves on the President's Foreign Intelligence Advisory Board, which gives him access to some of the most exclusive data collected by US spy agencies.

"What's interesting about this deal is the fact that Hunt, thanks to his policy position, is presumably as well-informed about the actual state of affairs in Iraq as anyone in the business world can be," Krugman observers. "By putting his money into a deal with the Kurds, despite Baghdad's disapproval, he's essentially betting that the Iraqi government -- which hasn't met a single one of the major benchmarks Bush laid out in January -- won't get it's act together."

"The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia," Krugman writes. "And I suspect that most people in the Bush administration -- maybe even Bush himself -- know this, too."
And the regional press are today reporting that the Iraqi government and Kurdish authorities are at loggerheads over this deal and others, which the Iraqi Oil Minister says are all illegal.
Iraq's northern Kurdish administration has demanded Baghdad's oil minister be sacked, following his remarks that oil contracts signed by the regional government are "illegal."

The call by the Kurdistan Regional Government (KRG) late Thursday deals another blow to attempts by Prime Minister Nuri al-Maliki to forge a national consenus on the controversial issue of dividing up the spoils of Iraq's vast oil reserves.

Oil Minister Hussein al-Shahristani should quit rather than "interfere in the internal affairs" of the Kurdish region, KRG spokesman Khalid Saleh told reporters in Arbil.

Shahristani at a recent meeting of OPEC in Vienna said that all oil contracts signed in Iraq's Kurdish region are "illegal" as a controversial oil law is yet to be passed in the parliament.
So Bush is telling the American nation that Iraq must pass its oil bill - over which negotiations are stalled - to further political reconcilliation. Meanwhile his friend is using his insider knowledge to bet that no such reconcilliation will take place. That's a disconnect of mammoth proportions, and must surely call into question Bush's belief in his own words for all but the most mindlessly loyal of cheerleaders.