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Hunt Oil Deal Documents Raise More Questions

POSTED: 11:58 AM ET, 07/ 3/2008 by Derek Kravitz

Democratic lawmakers say the Bush administration knew more than it let on about a controversial oil deal between Dallas-based Hunt Oil and Kurdish regional officials in Iraq, a move that sparked condemnation for complicating the country's ability to enact a nationwide oil law.

Hunt Oil, whose chief executive Ray L. Hunt is a member of the President's Foreign Intelligence Advisory Board and a major contributor to Bush's campaigns, signed a petroleum production-sharing contract in September (click here for The Dallas Morning News' coverage of the signing) with the Kurdistan Regional Government, the first since the semi-autonomous government unanimously adopted its own petroleum legislation in August.

Since then, Kurdish officials have signed oil exploration contracts and hope that foreign firms will ultimately invest $10 billion in the oil sector and extract one million barrels a day from the region over the next five years.

Some Iraqis have accused the Kurdish regional authorities of giving overly generous terms to foreign oil companies in production-sharing agreements. In those agreements, a foreign firm takes on all the risk of exploration but gets a share of production if it finds oil.

The Hunt contract upset the State Department, which has been pressing Iraq to adopt a petroleum law that would delineate the division of authority between the central and regional governments.

In a Sept. 28 meeting with the Washington representatives of major oil companies, two State Department officials insisted that the Bush administration's policy was that U.S. companies should not sign separate deals with the Kurdistan Regional Government without approval from the central government in Baghdad.

But Hunt Oil's general manager, David McDonald, wrote in a Sept. 28 e-mail (pdf) released yesterday by the House Committee on Oversight and Government Reform that "there was no communication to me or in my presence made by any of the 9 state department officials with whom I met ... that Hunt should not pursue our course of action leading to a contract. In fact, there was ample opportunity to do so, but it did not happen."

A Commerce Department official working at the U.S. Embassy in Baghdad who met with Hunt Oil officials in Kurdistan offered them further support and wished them "a fruitful visit to Kurdistan," documents show.

Five days after the announcement of the Hunt Oil contract, a State Department official contacted Hunt Oil to describe another "good opportunity for Hunt" in Iraq, prompting Jeanne L. Phillips, director of public and government affairs for Hunt Oil, to write to Hunt: "This is really good for us. ... I find it a huge compliment that he is 'tipping' us off about this.... This is a lucky break."

Phillips declined to comment on the documents and e-mails released by the committee, saying Hunt Oil "does not comment on correspondence between third parties" as a matter of company policy.

The release of the documents sparked some pundits and commentators to accuse the Bush administration and Hunt Oil of arranging an illegal back-door deal.

"All this strikes me as a wink-and-nod deal, that administration officials in Washington wanted arm's distance deniability if the deal stirred controversy," wrote Dallas Morning News columnist James Mitchell. "It seems to reflect different moods -- Washington officials favoring the deal and U.S. diplomats in Iraq who worrying that it might be counterproductive."

In a letter (pdf) dated today to Secretary of State Condoleeza Rice, Henry A. Waxman, chairman of the House Committee on Oversight and Government Reform, wrote that Rice "and other Administration officials have denied playing any role in these contracts. In the case of Hunt Oil, however, similar denials appear to have been misleading."

By Derek Kravitz |  July 3, 2008; 11:58 AM ET
Previous: Hunt Oil Deal Documents Raise More Questions | Next: Hunt Oil Deal Documents Raise More Questions


Please email us to report offensive comments.

Why believe this administration about anything, including the State Department's protestations that they didn't condone this deal? The grown-up way to interpret administration statements is to assume they're lying until proven otherwise.

Posted by: EricFlatpick | July 3, 2008 2:35 PM

Hunt was simply tipped off early that the petroleum smorgasbord was about to seat the slimey, fat, and greedy, corporations ousted for price gouging, and bad table manners in 1958. The big 4 oil giants sat down recently and woofed down the remaining meals/deals that were to be had.

Now that the price of light-sweet crude has sufficiently ballooned (due in large part to the war), the feeding frnzy is on. And they said this war wasn't about oil?

Posted by: tnasiti | July 3, 2008 6:22 PM


Posted by: PETER AMAURY | July 3, 2008 10:42 PM

Even befor the war started, remember when they all talked about if you are not in it, you wil not getting any part of the oil fields.
I remember in the news when they told UK and and many other US & EUR countries that Iraq oil fields were being/having dotted lines who gets what. And those countries which did not help in over throwing Iraq and freeing the people would not be part of it.
Gee, so when they had news about going into Iraq and talks about the oil fields in the news. Then NOTHING about the oil fields during the war and occupation, Now its all about the oil fields again.
And see the five major oil firms and the countries they are from!
Need I say more, I think not!

Posted by: Go alternate energy | July 3, 2008 11:14 PM

More lies and deceit from GWB. My god when will America be fed up with this back hand slap to America.

Posted by: Real Vets for vets | July 4, 2008 10:07 AM

America get out the Vaseline again. Bush is about to screw you some more.

Posted by: Zem Bob Way | July 4, 2008 10:10 AM

It better be Vaseline Petroleum Jelly! But again, the most larcenous, fraudulent, miscreant is the current resident of glooms-day at 1600. As stated before and now is worth repeating. Take a good look at the Bush/Cheney Trust portfolio, which they are now maxing out around 700% growth for their refineries. Now about this Kurdish thing, keep an open mind of how this militarily deficient warrior-leader (not)can be. He will outright attack Iran then to use our considerable strengths to get the position we requested. I do not like the idea of putting my family in the line of fire, is just unconscionable. Where are the other Bushes to go along with this one? Good grief, this resident president is making me nervous about the Kurdish insurgents. This president shown us time and time again, he has no clue of military strategy. And I don't want to read about who needs to be respected. Let's change that mind-set and make it mandatory. So this way the resident president will not be able to affect bad policy while for the sake of greed, there goes Bush and Cheney!

Posted by: carmelita chico | July 5, 2008 8:45 PM

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