Identifier
Created
Classification
Origin
06BASRAH69
2006-05-06 15:38:00
CONFIDENTIAL
REO Basrah
Cable title:
SOUTH OIL COMPANY CHIEF PESSIMISTIC, BUT COMMITTED TO A
how-toVZCZCXRO6179 OO RUEHDE RUEHIHL RUEHKUK RUEHMOS DE RUEHBC #0069 1261538 ZNY CCCCC ZZH O P 061538Z MAY 06 FM REO BASRAH TO RUEHC/SECSTATE WASHDC IMMEDIATE 0330 INFO RHMFISS/CDR USCENTCOM MACDILL AFB FL RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC RUEKJCS/SECDEF WASHINGTON DC RUEAIIA/CIA WASHDC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUCNRAQ/IRAQ COLLECTIVE RUEHBC/REO BASRAH 0349
C O N F I D E N T I A L BASRAH 000069
SIPDIS
SIPDIS
E.O. 12958: DECL: 5/6/2016
TAGS: ECON ETRD ENRG EINV PGOV IZ
SUBJECT: SOUTH OIL COMPANY CHIEF PESSIMISTIC, BUT COMMITTED TO A
BETTER FUTURE
REF: (A) BASRAH 38 (B) BASRAH 45
CLASSIFIED BY: Ken Gross, Regional Coordinator, REO Basrah,
State Department.
REASON: 1.4 (b),(d)
C O N F I D E N T I A L BASRAH 000069
SIPDIS
SIPDIS
E.O. 12958: DECL: 5/6/2016
TAGS: ECON ETRD ENRG EINV PGOV IZ
SUBJECT: SOUTH OIL COMPANY CHIEF PESSIMISTIC, BUT COMMITTED TO A
BETTER FUTURE
REF: (A) BASRAH 38 (B) BASRAH 45
CLASSIFIED BY: Ken Gross, Regional Coordinator, REO Basrah,
State Department.
REASON: 1.4 (b),(d)
1. (C) On May 4, Regional Coordinator (RC),Deputy RC and Poloff
met with South Oil Company (SOC) General Manager Jabbar Ali
Husayn al-Lu'aybi at the Regional Embassy Office (REO) as part
of an ongoing dialogue. Looking visibly tired, Jabbar started
the meeting on a positive note and confirmed reports that oil
production for April had increased to 1.91 million barrels per
day (MBPD). He also stated that his goal was to reach 2.00
MBPD. However, he was pessimistic about the chances for a
dramatic improvement in oil production in the next few years
unless the Ministry of Oil (MoO) institutes reforms.
2. (C) In previous meetings with al-Lu'aybi, he stressed the
need for reform at the MoO and the importance of a technocrat
leading the MoO (see Ref B). Al-Lu'aybi said reforms must be
implemented for the SOC to build greater production capacity.
He reiterated that if he were adequately resourced by the MoO
and the oil sector were allowed to function as is normal in
other countries, the SOC could dramatically improve production
capacity. Al-Lu'aybi described the bureaucratic morass standing
in the way of replacing needed essential equipment - permission
must be granted by the MoO for even the simplest purchase since
his purchasing authority is limited to approximately USD 25.
The time lag in buying desperately need spare parts easily can
reach a year, and Al-Lu'aybi added, "People in Baghdad don't
give a damn."
3. (C) The RC asked al-Lu'aybi for his opinion as to who would
become the Minister of Oil. He quickly declined to offer any
comment stating that he is an oilman, a technocrat who stays
away from politics as much as possible. When asked if he would
be willing to assume a position of authority in the MoO, Al
Lu'aybi paused and commented that he would do so if he would
have the freedom to implement necessary reforms.
4. (C) Comment: Al Lu'aybi continues to express his
frustration with the MoO and the SOC's lack of authority and
resources needed to enable it to operate to its full potential.
However, although pessimistic, he was proud of SOC's increased
oil production for the month of April. The formation of the new
government in Baghdad and the appointment of a new team at the
MoO make this a critical time for al-Lu'aybi - if the right
people are installed at the MoO, those would run the ministry
like a business instead of a political fiefdom, he believes SOC
can become a company whose profits can enrich the people of
Iraq. Al Lu'aybi is feeling the strain of being beholden to
political masters that do not understand business, but he also
clearly enjoys what he is doing, is good at it and is committed
to doing his best towards making the SOC an oil giant. End
Comment.
GROSS
SIPDIS
SIPDIS
E.O. 12958: DECL: 5/6/2016
TAGS: ECON ETRD ENRG EINV PGOV IZ
SUBJECT: SOUTH OIL COMPANY CHIEF PESSIMISTIC, BUT COMMITTED TO A
BETTER FUTURE
REF: (A) BASRAH 38 (B) BASRAH 45
CLASSIFIED BY: Ken Gross, Regional Coordinator, REO Basrah,
State Department.
REASON: 1.4 (b),(d)
1. (C) On May 4, Regional Coordinator (RC),Deputy RC and Poloff
met with South Oil Company (SOC) General Manager Jabbar Ali
Husayn al-Lu'aybi at the Regional Embassy Office (REO) as part
of an ongoing dialogue. Looking visibly tired, Jabbar started
the meeting on a positive note and confirmed reports that oil
production for April had increased to 1.91 million barrels per
day (MBPD). He also stated that his goal was to reach 2.00
MBPD. However, he was pessimistic about the chances for a
dramatic improvement in oil production in the next few years
unless the Ministry of Oil (MoO) institutes reforms.
2. (C) In previous meetings with al-Lu'aybi, he stressed the
need for reform at the MoO and the importance of a technocrat
leading the MoO (see Ref B). Al-Lu'aybi said reforms must be
implemented for the SOC to build greater production capacity.
He reiterated that if he were adequately resourced by the MoO
and the oil sector were allowed to function as is normal in
other countries, the SOC could dramatically improve production
capacity. Al-Lu'aybi described the bureaucratic morass standing
in the way of replacing needed essential equipment - permission
must be granted by the MoO for even the simplest purchase since
his purchasing authority is limited to approximately USD 25.
The time lag in buying desperately need spare parts easily can
reach a year, and Al-Lu'aybi added, "People in Baghdad don't
give a damn."
3. (C) The RC asked al-Lu'aybi for his opinion as to who would
become the Minister of Oil. He quickly declined to offer any
comment stating that he is an oilman, a technocrat who stays
away from politics as much as possible. When asked if he would
be willing to assume a position of authority in the MoO, Al
Lu'aybi paused and commented that he would do so if he would
have the freedom to implement necessary reforms.
4. (C) Comment: Al Lu'aybi continues to express his
frustration with the MoO and the SOC's lack of authority and
resources needed to enable it to operate to its full potential.
However, although pessimistic, he was proud of SOC's increased
oil production for the month of April. The formation of the new
government in Baghdad and the appointment of a new team at the
MoO make this a critical time for al-Lu'aybi - if the right
people are installed at the MoO, those would run the ministry
like a business instead of a political fiefdom, he believes SOC
can become a company whose profits can enrich the people of
Iraq. Al Lu'aybi is feeling the strain of being beholden to
political masters that do not understand business, but he also
clearly enjoys what he is doing, is good at it and is committed
to doing his best towards making the SOC an oil giant. End
Comment.
GROSS