Rebuilding Iraq's Oil Industry Could Take on Added Meaning

Abstract: Some U.S. companies will take part in bringing a free Iraq's petroleum infrastructure back to competitiveness, but is it also a chance to help change minds about America and Americans?

Analysis: It looks as if Iraq will be "liberated" in the next few weeks, and when the shooting finally stops, the people who assume the job of keeping that country from passing again into the control of a dictator will face a whole world of new problems. And count on it: The whole world will be watching how those problems are solved.

The biggest problem of all, of course, is that the deaths and injuries suffered by human beings on both sides of the conflict will be inscribed on countless minds--in Iraq and the Middle East as well as in coalition countries--for decades to come. It's the one true, sad inevitability of war, and spawns a form of bitterness that only time can diminish.

But in addition to the sadness and the social and cultural damage created by the Saddam Hussein regime and the fighting--and those are far-reaching--Iraq's new leaders also will be faced with an infrastructure that's damaged to a degree not yet calculated, despite the pinpoint accuracy with which coalition forces say they destroyed the Hussein regime's command-and-control ability while trying not to harm the rest of the country. One glance at news video will show anyone that 10 years of economic sanctions, combined with the injurious fury of battle, have created severe destruction, ranging from leveled homes and office buildings to bombed-out schools, hospitals, and businesses, to name just a few.

Iraq's crude oil resources, exceeded in volume in the Middle East only by Saudi Arabia's, is the obvious and only means, really, with which Iraqis can finance their country's reconstruction. And while re-introduction of large volumes of Iraqi oil into the world market may take some months to effect, the country's petroleum industry infrastructure is going to need at least a multibillion-dollar overhaul.

A new Iraq national oil company probably will be created to manage oil sales and oversee repair and refurbishment of her oilfields, pipelines, refineries, petrochemical plants, export terminals, and so on. And it can start off with something of immediate value: the oil itself. That only a few of Iraq's prolific wells were successfully fired by Saddam's thugs is a miracle that could reduce the time needed to restore her upstream petroleum operations by years.

But it's virtually certain that assistance will be needed from members of the international petroleum community. Major oil companies, for instance, probably will be asked to contribute new technology and valuable expertise--perhaps even people--in whatever form that would help improve oil production, yet assure that Iraq's control over her own oil resources is safeguarded. Obviously, the engineering and other oilfield assistance provided by a certain number of those companies will come from the U.S. and will be executed--in the field--by Americans.

It's even more certain that companies from the industry's oilfield manufacturing and service sectors will play key roles in the reconstruction and repair. To a large degree, the supplies and service capabilities of many of those companies will come from the U.S., and also will be performed by Americans.

But it's no secret that the attitude toward "America" held in many Middle Eastern nations today is one of distrust and, unfortunately, outright hatred. Whatever helped create this attitude--U.S. support of Israel, the invective of terrorists, the moral dictates of religious leaders, pure resentment, you name it--it's nonetheless true that America and its chief representative groups, American businesses, are today considered a threat to the security of practically all Middle East nations, including most so-called U.S. "allies" in the region. Equally unfortunate is that oftentimes, the American businesses nearest the firing line are oil companies, generally considered "American" in origin even if based in Canada, Europe, or elsewhere.

This same hateful attitude holds true in many other regions of the world. In fact, when it comes to U.S. oil companies, the mistrust is alive and growing even in their own country.

During the past few years, in the wake of actual corporate scandals in the U.S. "energy" industry, coupled with decades of "bad press" that added grist to the mill for interests who favor political, social, and environmental change, most of the major integrated oil companies and many large independents have mounted campaigns designed to demonstrate their "good citizenship" not only domestically, but overseas, as well. They openly discuss their solid commitment to the highest corporate ethical standards; their willingness to work with all stakeholders in developing new oil and gas resources, including other land users, environmental, and climate-change groups and regulators; and their interest in contributing to communities on all levels in the areas where they operate.

Overseas, say some, they have a major social responsibility in countries where they have operations, a commitment over and above their contributions to the countries' economic well-being in terms of production sharing and royalty payments. They are proud also of their willingness to train indigenous labor, with the ultimate goal of replacing their own expatriate personnel with host country nationals. They mention contributions of both capital and operational assistance in building roads and highways, schools, medical facilities, water plants and distribution systems, sewage plants, and other needed social infrastructure. The list of such added responsibilities continues to grow, thanks to this newly enlightened outlook.

The problem, however, seems to lie with an apparent powerlessness among many companies to successfully convey their genuine rededication to social awareness and readiness to assume widened corporate responsibilities--even as they back it all up with real action. Somehow, the news seems to be lost among the people who live in the host countries, themselves. That's somewhat true in the U.S., as well.

All of which is to say that if many people in the "Third World" apparently suspect Americans and American businesses to be tools for the rebirth of some kind of worldwide colonialism, a lot is going to ride on the petroleum industry's behavior and its actions in helping to reconstruct Iraq's petroleum infrastructure.

As ridiculous as it may sound to industry professionals, a lot of people around the world--and in the U.S., as well--readily accept the idea that because a major oilfield service company recently was the first company named by the U.S. government to help revamp Iraq's oil infrastructure, it was the direct result of the United States' second most powerful office holder having once been chairman of that company's board of directors. The recognized size and ability of the company to manage such a challenging job, and its willingness to do so quickly, in spite of the obvious risks, don't seem to count for much.

Many other companies will be contracted to do the fieldwork in Iraq, and some will be U.S.-based, while others will hail from other nations. But one thing is certain: The world will be watching, not just how well those companies perform their work, but also how they conduct themselves and, more important, how much they contribute to helping Iraq's people. Perhaps contractors and subcontractors alike would benefit by recognizing this before accepting jobs in Iraq.

And once committed, they should make every effort to use Iraq's surprisingly sturdy television network to publicize it. Even the biggest bombardment in history couldn't shut it down for long. Obviously, just as it does in this country, TV seems to be the best medium for reaching Iraqis where they live, in more ways than one.

But conducting business around the world, like many other things in this new millennium, appears to have changed forever. Perhaps it's no longer enough just to do good work. Maybe you also have to work for good--and then make sure everybody knows about it.