"The oil proceeds were, and still are, under the total control of the occupation. The details thereof are not clearly known since they are surrounded by mystery.
The report issued by the General Accounting Office points out that contracts, amounting to billions of dollars, were spent out of the Iraqi Development Fund, without being reviewed by any independent party. The committee affiliated to the Senates' Council also stated that the 20 billion dollars of the Iraqi funds that were spent one week before the transfer of the authority to the Iraqis "were described as waste, fraud, and abuse".
After handing out the authority to the temporary Iraqi Council of Governance on 28/6/2004, it is unknown yet who is the authority the US relies on in spending the Iraqi funds, distributing and approving contracts!
(emphasis added) The official US spokesperson in Baghdad says, "resuming funds allocation has been agreed upon by the dissolved coalition authority and the Iraqi officials."!"The Economy of the Occupation… To Whom it May Concern
October 8, 2005.In the South, and after 30 months:
"The Ministry of Oil has signed a Memorandum of Understanding with a well-known company to maintain the oil meters which are not working now
(emphasis added), in both Bakr Oil Terminal and Umaya Terminal.
He confirmed that current measurement is done by what he called ( engineering measurement on board the tanker ). He also confirmed that American technical teams had started the survey to repair the damaged meters and that part of the US grant money had been allocated for this purpose and a special committee headed by the deputy minister had been established for follow up."Asim Jihad, Iraqi Ministry of Oil spokesman, as reported by Al-Hayat newspaper
, October 10, 2005.
"As for any role for International Oil Companies (IOCs) and National Oil Companies (NOCs), none should be expected in the short or even medium term. It is the consensus of all concerned parties that having security and stability is by far the most serious concern and that seems to be a function of the political process and the presence as well as the role of the occupation forces. Simultaneously it is essential that dealings be handled through a permanent institution and not interim or transitional governments and parliaments, changing every few months. If the proposed draft constitution, to be put to a referendum on 15 October, is endorsed, then there will be new elections far a new parliament on 15 December. But if the draft constitution is rejected, then there will be elections for yet another interim parliament.
So in order to attract foreign companies in long-term deals there will be a need for:
· A new permanent government to be set up next February after the elections in December. This could again be another interim government if the constitution is rejected and in that case there will be a new referendum and elections around mid-2006.
· A new Hydrocarbon Law that will introduce the possibility of foreign investment and participation of IOCs and NOCs. Such a step might take quite some time, as in the case of Kuwait where Project Kuwait has been discussed for over 10 years and is still delayed by conflict between the government and parliament.
· All necessary fiscal and legal laws to guarantee foreign involvement.
· Restructuring of the Ministry of Oil and the re-establishment of Iraq National Oil Co (INOC).
· A clear oil policy that outlines the basic principles and modes to be followed for development, production-sharing, buyback, development and production, service contracts etc or possibly a combination for various fields.
· Specific priorities, with super-giant fields at the top of the list. Iraq in the past identified 33 oilfields for developments. But there will be a conflict on this issue among the proposed regions and provinces in Iraq. Iraq will certainly face a major problem of shortage of experienced technical, legal and financial staff to handle the preparation of the contracts and later their management. Iraq might need to adopt a policy of hiring consultants to assist the Ministry.
The above will depend entirely on the new constitution under discussion. The relevant articles to the oil and gas industries seem to contain the seeds for conflicts and possible fragmentation
(emphasis added), and hence a possible delay to proposed developments....."What Is Happening To Iraqi Oil?
Issam Al-Chalabi, from a paper presented at the 26th International Oil & Money Conference held in London on 20-21 September 2005, and in Arabic:
October 12, 2005
An article (in Arabic) on the status of Iraqi oil:
أ.د. خالد المختار
There are eight previous postings on this subject here, starting with:Where is the Iraqi oil money ?
.........December 13, 2004Oil-for-Food is now Oil-for-Grease
December 27, 2004On Iraqi People, Resistance and Oil versus American bases
February 5, 2005Iraqi oil (sp)oil .... and it may well get spoiled
...........................February 15, 2005Oil ? …. What oil ? … It is all about Freedom and Democracy and WMD (no, drop that last one)
March 18, 2005Oil ... and with Ahmad Chalabi as acting Oil Minister: "He trusted the cat with a piece of fat" - An Iraqi proverb
April 28, 2005Oil !! .... What oil ??
...................June 3, 2005The theft of Iraqi oil revenue
July 1, 2005The 'Metering' that will not be easily forgotten, or forgiven, by the Iraqi people