"Houston Exec Gets Top Iraq Energy Post"

David Ivanovich, Houston Chronicle, 23 September 2003

WASHINGTON -- Houston's Robert E. McKee III, a former ConocoPhillips executive, has been appointed the new senior adviser to the Iraqi Oil Ministry.

He will replace Philip J. Carroll, the one-time head of Shell Oil Co. who has overseen the often tumultuous effort to jump-start Iraq's oil sector for less than five months.His selection as the Bush administration's energy czar in Iraq already is drawing fire from Capitol Hill because of his ties to the prime contractor in the Iraqi oil fields, Houston-based Halliburton Co. He's the chairman of a venture partitioned by the giant Houston oil well service and engineering firm.

The Coalition Provisional Authority, in a brief statement released from Baghdad Monday, said McKee would take over as senior adviser next month.

He will report to L. Paul Bremer, the civil administrator of occupied Iraq, and serve as the liaison with Iraq's newly reconstituted oil companies.

The statement did not say why Carroll was leaving, except to note he would "return to private life."

Carroll could not be reached for immediate comment, but his wife, Charlene, reached by telephone in Houston, said Carroll had decided "it was time to hand it over to somebody else."

McKee also could not be reached for comment, despite repeated attempts.

Robin West, chairman of PFC Energy, a Washington-based energy consultancy, said the change in leadership is nothing more than a normal rotation out of Iraq, similar to the departure of Peter McPherson as the Provisional Authority's director of economic development.

Carroll, West said, "tried to do his best ... to bring order from chaos, but there were forces there beyond his control -- or anybody else's frankly."

McKee's appointment, however, comes as Iraq is still struggling to boost much-needed oil exports and meet basic domestic needs like gasoline and cooking oil.

Iraq has been able to ship only about 1 million barrels a day from its southern terminal, the London-based Centre for Global Energy Studies noted in a report.

That's a far cry from the export levels Bush administration officials had hoped to see by this time. But Iraq's oil workers have been forced to reinject the bulk of the crude production from the country's huge northern field of Kirkuk back into the ground, because a critical pipeline to Turkey has been shut down by repeated acts of sabotage.

On Sunday, Iraq produced 1.9 million barrels of oil, a record since the war, Bremer told a Senate panel. But he warned: "There will be bad days ahead. The saboteurs ... know how to attack ... where it hurts."

The chief responsibility of the senior oil adviser is to oversee the reestablishment of a functioning energy sector, purged of Baathist Party elements.

In a largely symbolic move to emphasize that transfer of power, Ibrahim Bahr al-Uloum, Iraq's newly appointed oil minister, will confer this week with other representatives from the Organization of Petroleum Exporting Countries in Vienna, Austria.

McKee's appointment already is coming under scrutiny because of his role as chairman of Houston-based Enventure Global Technology, an oil-field joint venture owned by Shell and Halliburton.

Halliburton's role in Iraq has been highly controversial, since the Corps of Engineers chose the firm once headed by Vice President Dick Cheney for the job of repairing Iraq's energy infrastructure without seeking bids from competing companies.

"The administration continues to create the impression that the fox is in charge of the hen house," said Rep. Henry Waxman of California, ranking Democrat on the House Government Reform Committee and a persistent critic of the Halliburton contract.

"Given Mr. McKee's close relationship with Halliburton, he's an odd choice to hold them accountable for the billions of dollars they are charging American taxpayers."

Officials from both ConocoPhillips and Enventure declined to discuss McKee's appointment Monday.

McKee, a native of Wyoming, earned a bachelor's degree in petroleum engineering from the Colorado School of Mines and a master's in industrial management from the Massachusetts Institute of Technology.

In 1967, he joined what was the Conoco in New Orleans and, over the next 36 years, worked his way up the ranks of the Houston-based oil giant.

In 1992, he was named executive vice president, responsible for the company's oil and gas exploration and production business, a position he would hold for a decade.

He retired in April, leaving what had become ConocoPhillips a wealthy man. McKee ranked second in the Houston Chronicle's latest list of 100 highest-paid executives, taking home $26.2 million in total compensation last year.

As the senior oil adviser, McKee will be responsible for both establishing energy policy for Iraq's new oil industry as well as operating a large petroleum operation, West noted. McKee is viewed as more of an operations man.

McKee also serves as co-chair of the volunteer committee for Super Bowl XXXVIII, to be played in Houston next year.