The Iraqi politician who filed a legal challenge against the award of the Rumaila oil field contract in December 2009 has failed to raise the estimated $250,000 in fees she needed to continue with her case.

Rumaila oil field facts
Current output 1 million b/d
Production target 2.85 million b/d
Known reserves 17 billion barrels
Remuneration fee $2 a barrel
Developer BP (UK) and CNPC (China)
b/d=Barrels a day. Source: Ministry of Oil

Sheda Musawi, an outgoing parliamentarian who brought the case against the Oil Ministry in December 2009, claims that the contract, awarded to the UK’s BP and China National Petroleum Corporation (CNPC), is not legal under the country’s constitution.

At the end of April, Iraq’s Federal Supreme Court gave Musawi two months to pay the fees or drop the case, in a move which most analysts saw as ending future challenges for oil field contract awards in Iraq.

The fees would have paid for the court to hire a number of international consultants to study technical issues related to the case (MEED 29:4:10).

It is unlikely Musawi will be able to raise the money required, bringing an end to the controversial case, sources close to proceedings tell MEED.

The Rumaila deal was the first of 11 contracts awarded to international oil companies (IOCs) to develop the country’s oil and gas resources.

She argued that the contract requires the approval of both parliament and the provincial government of Basra, neither of which was involved in the negotiation process for the contract.

“What an odd ending to a very weird case,” says one Baghdad-based legal source. “I never thought they would ‘shut her down’ like this. 

“Her arguments definitely did have legal traction and were sensible for the non-lawyers among us, although not very logically planned out.”

If upheld, the case would have had serious implications for the other contracts signed by international oil companies in June and December last year as well as for Iraq’s plan to increase oil production.