Galbraith tied to Kurdish oil

WASHINGTON, Oct. 16 (UPI) -- Career U.S. diplomat Peter Galbraith said he was financially involved in energy companies doing business in Iraqi Kurdistan for the past five years.

Galbraith, who was forced out of his recent post as deputy U.N envoy to Afghanistan over an election scandal, served as an adviser to Kurdish lawmakers in Iraq in their effort to gain autonomy over their region in the north of the country.

In 2004, the now-embattled envoy entered his Porcupine LP into a partnership with Norwegian oil company DNO, signing a measure to develop the Tawke oil field in Iraqi Kurdistan.

Galbraith's role was unknown until recently when it emerged that Porcupine was seeking compensation from DNO in closed-door arbitration in London.

In an interview with The Boston Globe, Galbraith said there was no conflict of interest with his role in Porcupine because he was not serving as a government representative at the time.

"The business interest, including my investment into Kurdistan, was consistent with my political views,'' he told the Globe. "These were all things that I was promoting, and in fact, have brought considerable benefit to the people of Kurdistan, the Kurdistan oil industry, and also to shareholders."

In September, the Kurdistan Regional Government in Iraq suspended its contracts briefly with DNO citing "unjustifiable" harm to its reputation regarding allegations of government involvement in the company.

The Galbraith controversy comes as Iraq prepares for a second round of auctions for 10 undeveloped oil fields containing reserves worth around $3 trillion.