Iraq’s oil minister, Jabbar al-Luaibi, has been nominated to head the long-awaited new Iraq National Oil Company (INOC), which will take over the ownership of the country’s state-run oil enterprises.
Oil Ministry spokesman Asim Jihad confirmed that Al-Luaibi had been appointed as president of INOC.
Al-Luaibi’s appointment leaves the position of oil minister open. His predecessor in the ministry, Adel Abd al-Mahdi, has been nominated as Iraq’s prime minister and has until 2 November to name his cabinet.
The new company, which is still to be formed, "will be in charge of Basra Oil Company, North Oil Company, all of it. More than the ministry,” Jihad told journalists at the CWC Basra Mega Projects conference in Istanbul.
Iraq’s parliament passed legislation earlier this year to reestablish INOC, which was dissolved in 1987 when it was merged into the Oil Ministry.
Currently the Oil Ministry is both an operator, through its subsidiaries, including Basra Oil Company, and regulator. Reforming INOC would reduce the Oil Ministry to a purely strategic and regulatory role.
The INOC president will report directly to Iraq’s cabinet and hold the title of minister. Its authority will not cover the Kurdistan Region, however, since the semi-autonomous region does not hand over its production to the federal government.
Along with the re-establishment of INOC, the absence of an overarching hydrocarbons law has long been a major problem for the sector's development. It was meant to set out the various responsibilities of the Oil Ministry, national oil companies, international oil company partners and their contracts. A draft form of the oil law was presented to parliament in 2007, but has languished for more than a decade awaiting approval.
In the absence of the law, both the federal Oil Ministry in Baghdad and the Kurdish Ministry of Natural Resources have moved ahead on their own accord. The Kurdistan Regional Government passed its own hydrocarbons law in 2007 and since then has signed dozens of production-sharing and exploration contracts. These have been deemed illegal by Baghdad, which itself has held numerous bid rounds.
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