PRT TIKRIT: WHO REALLY RUNS THE REFINERY?

C O N F I D E N T I A L SECTION 01 OF 03 BAGHDAD 000462 SIPDIS SIPDIS E.O. 12958: DECL: 02/11/2017 TAGS: ECON EPET KCOR EIND IZ SUBJECT: PRT TIKRIT: WHO REALLY RUNS THE REFINERY? Classified By: Stephanie Miley, PRT Deputy Team Leader, for reasons 1.5 (b) and (d). ¶1. (U) This is a PRT Tikrit, Salah ad Din cable. ¶2. (C) SUMMARY. A shadowy group of influential sheiks and politicians appears to exert a significant measure of influence over operations at the Bayji oil refinery. The exact composition of the group - possibly including the Governor of Salah ad Din province, Hamad Hamoud al Shakti al-Qaisi, and at least five powerful Bayji-area tribal sheikhs - and the precise amount of control wielded is unclear. During interviews conducted in January and February, refinery contacts conveyed to IPAO that unofficial power brokers regularly interfere in refinery operations, Ministry of Oil (MoO) directives notwithstanding. These local sheiks, provincial politicians, and their associates hold considerable sway over the local detachment of the Oil Protection Force (OPF) ) enabling fuel smuggling, preventing anti-corruption investigations, and providing a means of AIF infiltration of the refinery. While the Ministry of Oil is ostensibly in charge, in practice the sprawling facility is jointly controlled by a number of official and unofficial actors. As the GOI and Prime Minister al Maliki attempt to curb the rampant fuel smuggling and corruption at Bayji, total control of refinery operations by the MoO from Baghdad is likely a mirage. END SUMMARY. -------------- Outside Influences at the Refinery -------------- ¶3. (C) The Bayji oil refinery - which supplies northern and central Iraq with nearly all of its refined fuel - suffers from numerous technical issues which greatly impede production. These include sporadic crude oil supply, intermittent power failures, and an oversupply of heavy fuel oil waste product, which results in reduced functioning of the refinery. In addition to the technical problems, however, the facility is also subject to frequent interference by local tribal sheikhs, provincial politicians, and their associates. While the exact number of persons of influence is not clear, refinery contacts highlighted the role of some of the key players during interviews conducted on February 7-8 in Bayji (in and out of the refinery). A group of at least five area tribal sheikhs (Ibrahim Khalef, Nather Khalef, Musa Mayah, Raad Mehjoob, and Galeb Nafuz) may exert a significant measure of control over local operational decisions (especially in the Oil Protection Force, OPF). According to contacts, this group is often joined by the present governor of Salah ad Din, Hamad Hamoud al Shakti al-Qaisi, who - together with his chief of security, Abu Mazen (AKA Ahmed Abdullah al Jabouri) - appears to be heavily involved in fuel smuggling activities at the refinery. The existence of powerful sheikhs who exercise control behind the scenes is not unusual in Iraq, and their control is far from absolute. However, the continued influence in one of Iraq,s most strategic facilities by a shadowy, unaccountable group will threaten the success of even the best-intentioned GOI initiatives aimed at increasing output and reducing fuel smuggling at Bayji. -------------- Khader Out, Obeydi In -------------- ¶4. (C) The long-standing Refinery Director Abdel Khader will soon be replaced by Ali Obeydi - a Director General with the MoO from Baghdad. Considered by many to be a technocrat aware of but aloof from the corruption, Khader will apparently continue to work at the refinery as the Director of the North Refinery. Khader told IPAO on February 7 that he was being terminated as refinery Director for his refusal to arrange for regular &salary8 payments ) in the form of free tankers of fuel ) to be made to the Governor. Khader described a meeting called by Governor Hamad on January 20 involving the Chiefs of Distribution and Production where demands for fuel and cash payments were made by the Governor and his Director of Security, Abu Mazen. Khader told IPAO that shortly after he declined to participate in this "program" (unlike the Regional Chief of Distribution, Samir Abbas Mohammed) he received a call from an important Ministry of Oil official (NFI) in Baghdad instructing him to cooperate. According to Khader, his demotion was a direct result of his refusal to defer to the Governor's authority. ¶5. (C) Other assessments of Khader are not as positive. According to Ali Shakr Saman, a trusted local CF confidant who lives and works at the refinery, Khader allows AQIZ (through AQIZ agents who work in his Personal Security Detachment) to steal up to USD 40,000 per day for protection, BAGHDAD 00000462 002 OF 003 and also willingly cooperates with Abu Mazen and the Governor to ensure that the "salary" payments are made. On February 9, Saman told IPAO that Khader meets once a week at the Al Shahid mosque in Bayji with local sheiks in order to review refinery operations and ensure their satisfaction. Saman contradicted Khader,s claim that he was being deposed for attempting to stop corruption ) stating instead that the Governor recently sent a memorandum to the MoO requesting Khader's reinstatement as facility director. -------------- Control of OPF Key -------------- ¶6. (C) Charged with maintaining internal and external security at the refinery ) control of the Oil Protection Force (OPF) is essential to circumventing any safeguards in order to steal fuel. During two interviews on February 6-7, the Assistant Manager of Operations of the Northern District (and Chief of OPF activities in Bayji) Nebhan Mehjoob told IPAO that the sheikhs hold veto power over all decisions made regarding the OPF. According to Mehjoob, control of the OPF brings significant benefits to the sheikhs, who ) like the Governor, receive a monthly "salary", preferential hiring benefits for their tribesman, and the ability to exercise a veto over important organizational decisions made in Baghdad. The penalty for non-compliance is steep; despite the fact that he generally attempts to satisfy the sheikhs' demands, Nebhan,s house was firebombed in December, resulting in him receiving extensive injuries. (NOTE: According to Saman and CF refinery contact Usama Sabat, Mehjoob is a "good guy mixed up with bad guys." END NOTE.) ¶7. (C) In December, the Governor obtained permission from the MoO to appoint a trusted confidant, Amar Sawadi, as the new Director of the OPF at the refinery. (NOTE: In a meeting on December 27, Minister of Oil Al Shahristani appeared to have given the Governor clearance to appoint Sawadi to the position. The Governor told PRT Team Leader on January 7 that he favored Sawadi to replace Nebhan who was "weak". Sawadi is considered by most at the refinery to be considered the "Governor's man", and there was a palpable sense of relief that he did not take control of OPF. He was OPF director in 2003, but was terminated for allegedly stealing water trucks. END NOTE.) According to Nebhan, on January 2, the above-mentioned sheikhs and the Governor summoned Sawadi and Nebhan to a meeting in Tikrit. Nebhan's deputy, Sabah Khalef, described the meeting as an interview, stating that the sheikhs informed Sawadi at the meeting that the price of their acquiescence to his appointment was a doubling of their "salary" and two additional tribesmen of their choosing hired to OPF from each of their tribes. According to Nebhan, the meeting did occurr; however, Sawadi was ultimately rejected by the sheikhs because "they couldn't trust him." Nebhan emphasized that any future director of the OPF needs approval from Bayji as well as Baghdad. ¶8. (C) Nebhan gave IPAO a copy of his "top secret" "Bayji Refinery Protection Plan" on February 6. Listed as the greatest threat to refinery security at the top of the document was "a situation of disorder because of the interference of Sheiks, government officials, etc." -------------- Ministry Control Limited... -------------- ¶9. (C) MoO's ability to exercise strict control of the refinery through formal channels is often sporadic and/or limited. For example, despite a formal memorandum signed by the Oil Minister Shahristani in November 2006 which forbids distribution of benzene to private gas stations, the refinery regularly distributes fuel to numerous area gas stations. When queried about the memorandum on January 4, Distribution Chief Abbas informed IPAO and CF representatives that he wouldn,t abide by it. There is no doubt intense pressure upon Samir to distribute fuel to well-connected area power players. During the meeting in January with IPAO, he received a telephone call which may or may not have communicated a threat - after which he appeared visibly shaken. -------------- ...And Perhaps Arbitrary -------------- ¶10. (C) During the interview on February 7, Refinery Chief Khader received a call from Deputy Minister of Oil Motasam Akram Hassan ordering him to increase the daily allotment of kerosene for Kurdistan for the week. According to Khader, BAGHDAD 00000462 003 OF 003 seemingly arbitrary orders from Baghdad are a regular occurrence. And fuel distribution is a zero-sum game: in order to supply the extra kerosene for the north, reduced quantities would be distributed to Salah ad Din, Diyala, Ninewa, and Anbar. From the ground, it is difficult to differentiate between reasonable changes to fuel allotments and preferential, sectarian-based nepotism. However, according to distribution totals produced by Samir on February 7, Kurdistan already was receiving 44 percent of the kerosene produced at Bayji. -------------- Comment -------------- ¶11. (C) COMMENT. It is no surprise that ) in the wild west-like atmosphere of Bayji ) there are multiple power players vying for a measure of control over one of Iraq,s most strategic facilities. Influence over the refinery,s Oil Protection Force offers great benefits: increased access to smuggled fuel, the ability to offer employment to tribal members, etc. Although from Baghdad the Ministry of Oil and the Northern Oil Company may appear firmly in control of daily operations and assignments, the reality on the ground in Bayji is quite different. Memoranda are ignored, candidates are rejected, and refined fuel is stolen due to local pressure and intimidation, often assisted by the acquiescence and/or ignorance of the central Ministry. ¶12. (C) Diminishing the influence of local, unofficial power brokers will be critical to the success of the new Iraqi-led initiative to limit fuel smuggling from Bayji. Ultimate success in this endeavor will not only require boots on the ground but also the will to use them against corrupt local interests ) including the Governor and Abu Mazen - without fear of reprisal. The recent assignment of IA Strategic Infrastructure Battalions (SIBs) to refinery security is a good start, but the task of rooting out the entrenched corruption at the oil refinery in 2007 will be difficult at best. It would be a mistake to think the Strategic Infrastructure Battalions newly assigned to refinery security will be immune to the local pressure which has been so effective thus far; indeed some of the SIBs in the province already have a track record for ineffective and corrupt behavior. END COMMENT. ¶13. (U) PRT Tikrit thanks the soldiers of the 1st Battalion, 505th Paratroop Regiment, 82nd Airborne Division for their invaluable contributions and support that make this reporting possible. ¶14. (U) For additional reporting from PRT Tikrit, Salah ad Din, please see our SIPRNET reporting blog: http://www.intelink.sgov.gov/wiki/Tikrit. KHALILZAD