Iraq is expected to reach only a half plateau oil production at 6 million B/D by 2017 instead of the planned 12 million B/D, said a former Iraqi oil executive today in Dubai.
Speaking on the sideline of the National Oil Companies and Governments Summit, Jabbar Allibi, former director general of the South Oil Company and chairman of the board of directors in Iraq, said that the current legislation in the country does not help in attracting international oil companies to invest in the country. “During the third bid round, 12 blocks were awarded, while in the fourth bid round, only three blocks were awarded,” he said.
Allibi said that there is no clear policy in Iraq that governs the sector, and it will take time for the oil and gas industry to get back on track. “Politicians are hampering the development of the oil sector in the country,” he said. “They should work on legislation so the sector can be developed.”
The Kurds and the government of Iraqi Prime Minister Nuri al-Maliki have been at odds over the details of the oil and gas law for years.
Local Iraqi media reported that a recent nonfinalized deal between the Kurdish and Iraqi governments, along with a meeting between Maliki and Parliament Speaker Osama Nujaifi over the oil law, have rekindled hopes that a resolution might be in sight. But Othman Salman Gihlan, director general of the legal department at Iraq’s Council of Ministers, told JPT Online that the central government is still in talks with the local government. “We don’t have an exact frame time, as the law is still being reviewed,” he said.
The deal between the Kurdistan Regional Government (KRG) and the Iraqi government includes a provision that Baghdad will pay about USD 2 billion to foreign oil firms operating in Kurdistan as the cost of their operations.
The agreement also says that the Iraqi government, in cooperation with regional and provincial governments, will devise an oil policy for the country.
In 2007 and 2011, the federal oil and gas council was to review the oil contracts that the KRG signed with international firms. But the Kurds and a political coalition called Iraqiya List demanded that the oil and gas committee chairman, the KRG’s natural resources minister, and the Iraqi oil minister form a committee to review the contracts.
Iraq’s constitution states that the KRG has the right to control the oil and gas fields that were discovered in its region after 2003. The Kurds have signed about 50 deals with foreign firms so far. But Baghdad has objected to the terms of the deals and accused the KRG of giving large shares to foreign companies. The disputes have hampered the passage of an oil and gas bill in the Iraqi Parliament.