BAGHDAD, Iraq - Retired Texas oil executive Philip J. Carroll, the Pentagon's hand-picked adviser overseeing the reconstruction of Iraq's oil industry, acknowledged yesterday that he faces potential conflicts of interest because of his financial holdings in American companies planning to bid on Iraqi oil contracts.
"Absolutely," he said of potential conflicts, in a wide-ranging interview with the Los Angeles Times, a week into his job as senior adviser to an emerging Iraqi oil ministry.
Carroll, however, stressed that he will attempt to avoid conflicts by distancing himself from the oil contracting process.
He has also declared to the Defense Department all of his financial holdings in companies that might seek a role in rebuilding Iraq, he said.
"I know at this stage of my life I don't want my reputation tarnished," said the 65-year-old Houston resident. "And I will stay so far away from any consideration of the bidding process, evaluation process or even the administration and arbitration of things associated with any of those companies in which I have a financial interest. ... Believe me, I will have absolutely nothing to do with it."
Carroll also vowed that he will not advise Iraqis to privatize their oil industry.
Rather, he will present an array of alternatives, including continuation of the 100 percent state-owned system in place during the regime of Saddam Hussein.
"I would not be surprised if they pick something other than the American model," said Carroll, 65, who retired a year ago from Fluor Corp. "If they did pick that [American model], it might be a wonderful thing in some people's eyes. It probably would not be a wonderful thing in everyone in Iraq's eyes."
Even after a 32-year career with Shell Oil Co. in Texas, where he retired as its chief executive officer, and another four years as the head of Fluor, Carroll sounds like an advocate for keeping Iraqi oil as a national industry.
"You have to realize that oil occupies a very important and unique place in the minds of the Iraqi people. It constitutes the overwhelming, dominant economic force in the country," the Texas oilman said. "It provides the wherewithal of building a better life for the Iraqis.
"There are also feelings throughout the population that oil represents, in essence, the national heritage of Iraq."
Documents on file with the Securities and Exchange Commission show that Carroll continues to be paid more than $1 million a year from Fluor Corp. in retirement benefits and bonuses pegged to the company's performance.
Carroll also owns about 1 million shares of the company's stock, according to its latest proxy statement. Fluor has said it plans to bid on a U.S. Army Corps of Engineers contract to rebuild Iraq's oil industry to pre-war levels.
Last fall, Carroll said, he began working for the Pentagon, developing contingency plans for Iraq's oil sector in the event of war. He assumed his work was completed, he said, until Defense Secretary Donald H. Rumsfeld called him shortly after the U.S.-led invasion began and offered him the oil adviser's job.
"My response was, 'Well, this is not high on my hit parade list right now,'" Carroll said. "But under the circumstances, you just can't say no. It's one of those, 'I made an offer he couldn't refuse.'"
He said his most immediate concern is the oil crisis paralyzing a nation that owns an estimated 112 billion barrels of oil, reserves that are second only to those of Saudi Arabia. He says that he and the hand-picked Iraqis serving with him will ease the shortages of gasoline and natural gas by June 1, along with the mile-long lines at the gas pumps that have tormented Iraqis since the U.S.-led coalition occupied Iraq.
Plugging into the same type of business prowess that allowed Iraq to skirt sanctions for more than a decade, Carroll said the U.S.-led coalition running Iraq is trading some of the large stocks of fuel oil and diesel that are clogging Iraq's pipelines and storage tanks for Kuwaiti gasoline and natural gas.
Since the U.S.-led invasion in March, clogged oil pipelines have forced Iraq's refineries to produce only limited quantities of gasoline.
Mark Fineman writes for the Los Angeles Times, a Tribune Publishing newspaper.Copyright © 2014, Los Angeles Times