Iraq’s plans to create a new National Oil Company (NOC) are “on hold” and official discussions on the issue will only restart when a new government is formed, according to industry sources.

“The new oil company is on hold until the next government is formed,” said one source.

“Who will the control the purse strings when it comes to dealing with the country’s oil fortune when the new company has been created? This is a key issue that has not been decided. It will be either the oil ministry or the NOC.”

Lawmakers voted through a law to establish the new NOC in March.

At the time officials said the new NOC would serve as an umbrella organisation for existing Iraqi state oil firms, leaving the ministry free to concentrate on broader strategy objectives for the development of the Iraqi energy sector.

Sources have told MEED that the new NOC will be modelled on the structure used by the Abu Dhabi National Oil Company (Adnoc).

Iraq is still a long way from forming a new government after its election on 12 May.

The election delivered a surprise win for Shiite cleric Muqtada al-Sadr, but his Sa'iroun political bloc fell short of the majority needed to govern.

The final results are yet to be approved by the federal court, and the winning coalitions haven’t been able to form a new government.

The last parliament’s term ended on 31 June.