PRT NAJAF: FORMER OIL MINISTER AND COR CANDIDATE

C O N F I D E N T I A L BAGHDAD 000513

SIPDIS

DEPARTMENT FOR NEA/I

E.O. 12958: DECL: 02/25/2020
TAGS: EPET PREL KDEM OESC IZ
SUBJECT: PRT NAJAF: FORMER OIL MINISTER AND COR CANDIDATE
WEIGHS IN ON DE-BA'ATHIFICATION, OIL, AND EDUCATION

Classified By: PRT Team Leader Angus Simmons for reasons 1.4 (b) and (d
)


1. (U) This is a Provincial Reconstruction Team (PRT) Najaf
reporting cable.


2. (C) Summary: Najaf parliamentary candidate and former Oil
Minister Ibrahim Bahr-Uloum (Iraqi National
Alliance/Independent) met PRT Team Leader February 18 to
discuss his campaign and the impact of de-Ba'athification.
Bahr-Uloum discussed the short history of the Al Alamein
Institute he founded in Najaf in 2008. Bahr-Uloum also
talked at some length about the oil industry in Iraq and his
concerns with the last round of bidding and outlook for the
industry. End Summary.


3. (C) On February 18, PRT met with Najaf Parliamentary
Candidate Ibrahim Bahr-Uloum (Independent, aligned with the
Iraqi National Alliance-INA). Bahr-Uloum said he is trying
to link his campaign to civil society, emphasizing voter
education and civic responsibility, and building a strong
parliament. He has actively participated in marches, mingling
with pilgrims during Ashura and Arba'een religious holidays.

DE-BA,ATHIFICATION TOUCHES SENSITIVE NERVE FOR SHI'A
-------------- --------------


4. (C) Bahr-Uloum told PRT Team Leader that he passionately
believes that "Najaf is the compass of Iraqi politics. The
center of Shi'a resides in Najaf regardless of nationality."
He appreciated the Ambassador,s message of opposition to the
Ba'ath in February 6 interviews, but emphasized that the
United States should be aware that this is a "redline" for
Iraqi Shi'a.


5. (C) Bahr-Uloum opined that security is better in Najaf
than Karbala and stressed that it is important that security
remains good in Najaf. He explained that the impression most
foreigners (from the Gulf region) now have of Iraq is based
on their experience flying into Najaf International Airport
(NIA) and visits to the local holy sites, and expressed
thanks for the PRT's support of the airport project, which
has supported Najaf's aspirations for openness, scholarly
exchange, and business relationships around the world.

AL ALAMEIN INSTITUTE - A SUCCESS STORY FOR GRADUATE STUDIES
-------------- --------------

6. (U) Bahr-Uhloum told PRT TL his family founded the private
Al Alamein Institute in 2008. One of only three private
schools for graduate work in Iraq, the institute in political
science has approximately 100 students enrolled in Masters
and Ph.D. programs. The school has no restrictions on
admissions, but serves mostly Shi'a from south-central Iraq
and recently had a visit from five University of Chicago
professors. According to Bahr-Uhloum, Al Alamein has a
significant endowment, including support from the Marja'iyah
(senior Shi'a clergy) which covers approximately 80% of the
cost of running the institute. The rest is recovered from
student fees. However, the school has faced an uphill battle
for accreditation by the Ministry of Higher Education, which
is unused to licensing private graduate schools. He welcomed
any opportunities for exchange with western scholars that the
PRT could support. Bahr-Uhloum told PRT TL that Grand
Ayatollah Sistani endorsed the goals of the Institute, and
the openness of the Marja'iyah to scholarship was a trademark
of Najaf.

REFLECTIONS, FORECASTS AND THOUGHTS ON THE IRAQI OIL INDUSTRY
-------------- --------------


7. (C) The former two-time oil minister disparaged the GOI's
goal of producing 12 million barrels of oil per day (bpd).
Qgoal of producing 12 million barrels of oil per day (bpd).
He noted that both the 5-6 million bpd day forecast for 2015
and the 2020 goal of 8 million bpd are unrealistic.
Bahr-Uhloum opined that four million bpd seems reasonable
given the infrastructure challenges that the industry faces.


8. (C) Bahr-Uloum expressed concern that something was "not
right" with the recent oil bid round in December. He
suggested that the production targets of 2.85 million barrels
per day (Mbpd) bid by BP (with CNPC) for the Rumaila oilfield
and 1.8 Mbpd bid by Royal Dutch Shell (with Petronas) for the
Majnoon oilfield were overly ambitious. He said that
allocating 33 percent of Iraq's oil reserves to BP/CNPC and
Shell/Petronas seemed unreasonable. (Comment: The total
reserves of Rumaila and Majnoon are about 26 percent, not 33
percent. End comment.) Bahr-Uloum claimed there were
technical and legal problems and inevitably too much
corruption with the bidding process, and that the national
energy strategy was disjointed and overlooked smaller, viable

sites such as Najaf. (Comment: Iraq's two 2009 bid rounds
have been internationally regarded as open, equitable, highly
transparent, highly competitive, and well organized and
implemented, with no apparent corruption. Therefore, Uloum's
claims of technical and legal problems and corruption in the
bid rounds have no obvious basis. Iraq currently has no
cross-ministry national energy strategy. Therefore, the
development of its oilfields and the use of production from
these oilfields are not according to a strategy formally
coordinated across the relevant Iraqi ministries. End
comment.) Bahr-Uloum explained that there are three known
oil fields between Najaf and Karbala (Kifl, Kifl West, and
Merjan) that in total could produce approximately 50,000 bpd
of oil and 8 billion British Thermal Units (BTUs) per day of
natural gas. (Comment: The Ministry of Oil estimates these
fields can produce at least 75,000 bpd within 7 years after
extensive oilfield development has begun. Bahr-Uloum,s
estimate of 8 billion BTUs of associated gas production is
similar to estimates for other nearby oilfields. End
comment.) He said that development of these smaller fields
could provide important jobs. He asked, "Why do we have to
import oil from other provinces to fuel our refinery in Najaf
when oil is available in the province?" (Comment: The Kifl,
Kifl West, and Merjan oilfields were offered in the December
oil bid round but received no bids. End comment.)


9. BIO NOTE: Bahr-Uloum was twice (2003 and 2005) the Iraqi
Minister of Oil, and is from one of Najaf's most prestigious
families. One of his progenitors was a Grand Ayatollah in
the eighteenth century and two others were Ayatollahs. His
father, a member of the Governing Council for the Coalition
Provisional Authority (CPA),is noted cleric Sayed Mohammad
Bahr-Uloum. Dr. Ibrahim Bahr-Uloum graduated with a Ph.D. in
petroleum engineering from New Mexico Tech and previously
worked for the Kuwaiti oil ministry, the Petroleum Recovery
Research Center in New Mexico and as a consultant in London
from 1992 to 2003. Seventeen of his family members were
killed by the Saddam regime. End Comment.
HILL