Just published from the Middle East Economic Survey and written by Tariq Shafiq, who is the Founding Executive Director, Iraq National Oil Company (INOC), Dircetor, Petrolog & Associates, and Chair, Fertile Crescent Oil Development Co. Based in Baghdad, Iraq.
The constitution doesn’t do any favors for the large International Oil Companies that would like to come to Iraq. This is going to be a hot contested debate with the Governorates and the Iraq central government.
Mr. Shafiq, raises some very good points:
“Without a central unified policy there will be disharmony and competition between INOC (operating on production and marketing its export oil to provide the state’s income) and the Regions and Governorates (operating on exploration for unneeded additional reserves), and among the various Regions and Governorates, with disharmony and envy between the haves and have-nots. This would lead to an unhealthy oil industry, causing instability and damaging consequences contributing to the fragmentation of the country”
“Leaving the constitutional terms unchanged, the Regions and Governorates’ likely course would be to go down the route of indiscriminate PSAs and second rate oil companies and the damaging consequences enumerated above. This would also be regarded by critics as inviting privatization of the nation’s very livelihood through the back door; a policy known to be absolutely unacceptable by the nation”
This is a very good read if your interested in the future of the oil contracts in Iraq if there ever will be unless the government of Iraq and all the Governorates can agree on a unified policy. Sure you’re going to have explorations for oil like with the Kurds in the north with the recently signed contracts with Canada Western Oil Sands, Inc. and the Norwegian company Det Norsje Oljeselskap. However, they have not been approved by the central government of Iraq and signed into law.
From the State Department regarding the Kurdish Oil Contracts with Foreign Firms.
In March 2006, Robert Silverman, who directs the department’s Office of Iraq Economic Affairs, said the contracts set a worrisome precedent for the country and that they could cause instability if Iraq’s southern regions followed Kurdistan’s lead.