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Iraq’s oil minister, Dr. Hussain al-Shahristani, is facing questions from members of the country’s parliament in Baghdad regarding the auction of production contracts for the nation’s oilfields.
Shahristani has been under fire recently from all quarters regarding the auctions, the winners of which are to be announced live on Iraqi television by the minister next week.
Some politicians have voiced concerns that the complicated contract process has delayed the signing of agreements and has meant that Iraq has lost billions of dollars of oil revenues.
“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,” one of Iraq’s vice presidents, Abdul-Mahdi recently told Reuters.
“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.
Others have stated that the contracts are giving away Iraq’s vast oil reserves on the cheap and that the situation will lead to Iraq being exploited by foreign oil companies.
“The oil minister must convince us why the government should have spent US$8 billion to develop oilfields, but then offers them to foreign firms like pieces of cake,” Jabir Khalifa Jabir, secretary of the parliament’s oil and gas committee, said recently.
Sharistani’s policies have also come under harsh criticism from within the oil and gas industry in Iraq. More than 20 executives from the state-owned South Oil Company (SOC) are believed to back the director-general of the company who stated that the fixed fee contracts were “detrimental to the Iraqi economy” in a recent interview with Reuters.
“We in the South Oil Company, all of its leadership, reject the first bidding round [for oil service contracts] because it is against the interests of Iraq’s oil industry”, al-Nema is quoted as saying.
“[The contracts] will put the Iraqi economy in chains and shackle its independence for the next 20 years,” he added.
Shahristani is also expected to be questioned over the continuing conflict with the autonomous region of Iraqi Kurdistan. The Kurdistan Regional Government (KRG) has been at loggerheads with the Iraqi Oil Ministry over the awarding of “illegal” production contracts in the area.
