ERBIL, Kurdistan Region – Iraq’s Ministry of Oil is committed to forming the Iraqi National Oil Company (INOC) to operate Iraq’s oil fields and to capture gas flares for electricity generation – despite earlier constitutional concerns.
Thamer al-Ghadhban, Iraq’s minister of oil, was hosted by state media al-Iraqiyah to talk about Iraq’s oil industry. The minister discussed institutional and bureaucratic reform in the ministry.
The ministry is determined to establish the INOC, he said.
“We are moving ahead with forming the Iraqi national oil company,” the minister told the news channel.
The national oil company was Ghadhban’s brainchild, hatched in the post-2003 period after the fall of Saddam Hussein. After delays and setbacks, he is keen to revive the project.
Ghadhban said he supervised the writing of the draft bill of the national oil company, and it was about to be ratified in 2003, but dropped. A second attempt in 2007 saw a committee formed to examine the issue, but again it fell by the wayside.
“It never saw light, just like the Oil and Gas Law,” he said.
At the end of his term in power, former Iraqi PM Haider al-Abadi established the INOC, headed by his oil minister Jabbar al-Luaibi. However, several MPs in the Baghdad parliament objected.
Many thought the move was designed to allow Abadi to retain influence over the future of Iraqi oil by installing a loyal man such as Luaibi to head the company and strip the new Iraqi PM Adil Abdul-Mahdi of power over crucial sectors.
Eventually, the new parliament and government formally abolished it.
“The bill’s content wasn’t good. It had issues. One of the issues, as I observed then, is that the writing changed the company’s [role] from that of operating to that of ownership [of oil],” he said.
Under Iraq’s constitution, oil belongs to the Iraqi people. An interpretation that appears to hand oil resources to a company throws up constitutional problems.
The resurrection of the INOC could be done in one of two ways. Either the parliament makes amendments to the previous bill to rectify the constitutional issues, or the council of ministers prepares a new text and then puts it before parliament.
“I prefer the latter, but I don’t insist too much about it,” said Ghadhban.
The INOC will not minimize the role of the Ministry of Oil, he added.
A National Refinery Company and a National Gas Company are also planned.
“What the Iraqi oil industry has gone through reflects what the Iraqi people have gone through as a result of the previous wars,” the minister said.
The Iran-Iraq war (1980-88) saw Iranian jets strike Iraqi oil fields and infrastructure, setting the industry back years. Moreover, the embargo imposed on Iraq due to its invasion of Kuwait deprived it of critical technology to develop its oil fields.
Since the new Iraq was created after 2003, officials have had to “rebuild what has been destroyed” – never mind building and growth, Ghadhban said.
However, “things have changed now,” he said.
There are four gas projects on the table “being discussed seriously.” One of them is al-Halfaya, which is expected to produce 300 million cubic meters per day.
Basra gas projects are also growing, Ghadhban said. “When these projects finish, we won’t see such big [gas] flares”
There is “urgent” need for the gas for electricity generation, the minister added.
The southern Iraqi province of Basra was rocked last year by deadly protests sparked in part by shortages of electricity.
Petrochemical plants are also in the pipeline.
Iraqi officials, especially those who served in Abadi’s office, had said they aim to end gas flares in Iraq by 2021. The German company Siemens also presented the Abadi administration with a plan to end gas flares.
However, for all these projects, they have an issue. Their investment budget was halved in the 2019 Iraqi budget bill, Ghadhban said.
Although their ministry oversees a sector that provides 90 percent of Iraq’s revenues, it has no power over allocation, expenditure, or the usage of funds, he added.
Iraq is not currently expanding oil production because of a deal with OPEC designed to reduce the oil glut in the international markets and help prices recover.
Thamer al-Ghadhban, Iraq’s minister of oil, was hosted by state media al-Iraqiyah to talk about Iraq’s oil industry. The minister discussed institutional and bureaucratic reform in the ministry.
The ministry is determined to establish the INOC, he said.
“We are moving ahead with forming the Iraqi national oil company,” the minister told the news channel.
The national oil company was Ghadhban’s brainchild, hatched in the post-2003 period after the fall of Saddam Hussein. After delays and setbacks, he is keen to revive the project.
Ghadhban said he supervised the writing of the draft bill of the national oil company, and it was about to be ratified in 2003, but dropped. A second attempt in 2007 saw a committee formed to examine the issue, but again it fell by the wayside.
“It never saw light, just like the Oil and Gas Law,” he said.
At the end of his term in power, former Iraqi PM Haider al-Abadi established the INOC, headed by his oil minister Jabbar al-Luaibi. However, several MPs in the Baghdad parliament objected.
Many thought the move was designed to allow Abadi to retain influence over the future of Iraqi oil by installing a loyal man such as Luaibi to head the company and strip the new Iraqi PM Adil Abdul-Mahdi of power over crucial sectors.
Eventually, the new parliament and government formally abolished it.
“The bill’s content wasn’t good. It had issues. One of the issues, as I observed then, is that the writing changed the company’s [role] from that of operating to that of ownership [of oil],” he said.
Under Iraq’s constitution, oil belongs to the Iraqi people. An interpretation that appears to hand oil resources to a company throws up constitutional problems.
The resurrection of the INOC could be done in one of two ways. Either the parliament makes amendments to the previous bill to rectify the constitutional issues, or the council of ministers prepares a new text and then puts it before parliament.
“I prefer the latter, but I don’t insist too much about it,” said Ghadhban.
The INOC will not minimize the role of the Ministry of Oil, he added.
A National Refinery Company and a National Gas Company are also planned.
“What the Iraqi oil industry has gone through reflects what the Iraqi people have gone through as a result of the previous wars,” the minister said.
The Iran-Iraq war (1980-88) saw Iranian jets strike Iraqi oil fields and infrastructure, setting the industry back years. Moreover, the embargo imposed on Iraq due to its invasion of Kuwait deprived it of critical technology to develop its oil fields.
Since the new Iraq was created after 2003, officials have had to “rebuild what has been destroyed” – never mind building and growth, Ghadhban said.
However, “things have changed now,” he said.
There are four gas projects on the table “being discussed seriously.” One of them is al-Halfaya, which is expected to produce 300 million cubic meters per day.
Basra gas projects are also growing, Ghadhban said. “When these projects finish, we won’t see such big [gas] flares”
There is “urgent” need for the gas for electricity generation, the minister added.
The southern Iraqi province of Basra was rocked last year by deadly protests sparked in part by shortages of electricity.
Petrochemical plants are also in the pipeline.
Iraqi officials, especially those who served in Abadi’s office, had said they aim to end gas flares in Iraq by 2021. The German company Siemens also presented the Abadi administration with a plan to end gas flares.
However, for all these projects, they have an issue. Their investment budget was halved in the 2019 Iraqi budget bill, Ghadhban said.
Although their ministry oversees a sector that provides 90 percent of Iraq’s revenues, it has no power over allocation, expenditure, or the usage of funds, he added.
Iraq is not currently expanding oil production because of a deal with OPEC designed to reduce the oil glut in the international markets and help prices recover.
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