Related: Iraq to the future | Mixed messages from Iraq | Paving the way to a brighter Iraq
The controversial policies of Iraq’s Oil Ministry, most notably the highly unpopular fixed fee contracts being offered to IOCs, have come under fire from the country’s parliament.
News agency Reuters reported that the parliament’s Oil and Gas committee submitted a petition containing 140 MP’s signatures that called on the Iraq’s Oil Minister Hussain al-Shahristani to explain why his policies have led to “huge shortages” in oil revenues.
Iraq’s huge reserves of oil have not attracted as much interest as first envisaged by the country and the fixed fee contract is seen by many people both inside and outside the Gulf state as the reason for this.
The contract differs from the one preferred by IOCs in that companies receive renumeration in kind for each produced barrel as well as cost fees. IOCs prefer a contract that offers both profit shares and the ability to book reserves.
So far there has been few major contracts signed to develop the country’s oilfields.
Another stumbling block was the Iraq Oil Ministry massively increasing the price IOCs had to pay to develop the ay of Iraq’s major oilfields from an initial total figure of US$1634 million to almost $2.5 billion.
Adel Abdul-Mahdi, one of Iraq’s vice presidents was reported by Reuters as being “unsatisfied” by the country’s slow progress in developing its huge oil reserves.
“About the oil industry … no, I’m not happy with what we did there since 2003. Six years without real contracts, without a refinery contract,” Abdul-Mahdi reported by Reuters as saying.
“We need foreign investment and we need to go forward and deal with those issues in an open minded way, open to the necessities of market and new economic realities, which are not realised by many of our colleagues,” he added.
Iraq has the world’s fourth largest oil reserves with an estimated 115 billion barrels.
