US energy secretary discusses oil production with Saudi Arabia, Iraq

When the waiver expires, Iraq could face substantial US sanctions, including being shut out of the US financial system.
Friday 14/12/2018
US Energy Secretary Rick Perry speaks during a joint press conference in Arbil, the capital of the autonomous Kurdish region of northern Iraq on December 11, 2018. (AFP)
US Energy Secretary Rick Perry speaks during a joint press conference in Arbil, the capital of the autonomous Kurdish region of northern Iraq on December 11, 2018. (AFP)

WASHINGTON - US Energy Secretary Rick Perry visited Saudi Arabia and Iraq to drum up business for US energy companies and urge his counterparts to maintain oil production levels in the face of declining Iranian exports.

Perry met with Iraqi President Barham Salih and other Iraqi leaders on December 11, one week before the expiration of a waiver from Iran-related sanctions that the United States granted Iraq.

When the waiver expires, Iraq could face substantial US sanctions, including being shut out of the US financial system if it continues to buy oil from Iran, a major trading partner.

Perry gave no indication of whether the United States would extend the waiver, which it granted in recognition of the substantial amount of oil Iraq buys from neighbouring Iran.

Accompanied by executives from more than 50 US companies, Perry urged Baghdad to enter into partnerships with the companies to help Iraq develop its own energy resources towards becoming energy-independent.

“Working together, the US and Iraq can develop Iraq’s oil, gas and water industries,” Perry said in Baghdad. “The time has come for Iraq to break its dependence… on less reliable nations seeking domination and control.” Perry was referring to Iraq’s energy-reliance on Iran.

In Iraq, Perry urged leaders to improve the country’s business environment to attract American companies. He stressed “the importance of a transparent, predictable and accountable business environment to attract further investment in Iraq’s energy sector,” the US Energy Department said in a statement.

Perry conveyed “a firm message” to Iraq’s newly formed government that the Trump administration “is serious about its desire to help make Iraq energy independent. However, further steps are needed to improve the business climate and reduce the malign influence of Iran.”

The steps include increasing oil production and exports to Turkey that go through Iraqi Kurdistan.

Although Baghdad and the Kurdistan Regional Government recently allowed Iraqi oil exports to resume through the Iraqi Kurdistan pipeline, Perry said oil exports must be increased.

After his Baghdad meeting, Perry travelled to Erbil to meet with Kurdistan Democratic Party President Masoud Barzani and other regional leaders.

Perry’s visit to Iraq was only the second by a member of Trump’s cabinet. US Defence Secretary James Mattis visited Iraq in 2017 as fighting against Islamic State (ISIS) fighters in northern Iraq ended.

In Saudi Arabia, December 10, Perry pushed for a deal that would allow US companies to build nuclear reactors in the country under a US law that places restrictions on nations that work with US nuclear firms.

“Any nation seeking to develop a truly safe, clean and secure nuclear energy programme should turn to American companies which have the ability to provide the technology, knowledge and experience that are essential to achieving that goal,” Perry said in a statement after meeting with Saudi Energy Minister Khalid al-Falih.

In Washington, two Democratic members of the US Senate Foreign Relations Committee objected to Perry’s discussions and urged an “immediate and indefinite suspension of any negotiations” with Saudi Arabia to allow American firms to build nuclear reactors in the country.

The Trump administration has been working since February to let US companies build nuclear reactors in Saudi Arabia, the Arms Control Association said.

Before flying to Saudi Arabia, Perry stopped in Doha and urged Qatari officials to expand partnerships with US companies and increase production of liquefied natural gas, which can be used to generate electricity.