27-09-04
Iraq is drawing up plans to involve the private sector and foreign oil majors in its state-run oil industry in order to generate funds for rehabilitation and expansion in the sector estimated at $ 50 bn over 10 years, an Iraqi oil expert said.
The government alone cannot come up with enough money to restore the oil
industry, "the power house of the Iraqi economy," which has been left
run down by successive wars and years of UN economic sanctions, Sabah Jumah, a
former oil ministry director-general, told a conference on the Iraqi oil sector.
A revived state-owned Iraq National Oil Company (INOC) -- a body abolished in 1987 by ousted president Saddam Hussein -- would have "full ownership and control of its existing producing assets", said Jumah who now runs an oil consultancy in Baghdad.
"Ownership of the key pipeline network for both oil and gas, including
export terminals, will (also) remain in state hands for the foreseeable
future," he said.
But the private sector will play the bigpart in "new activity, exploration,
development of undeveloped fields, major refinery refurbishment, new refinery
construction and petrochemicals... Joint ventures between International Oil
Companies (IOCs) and Iraqi private sector companies will be encouraged."
Jumah said this was how the Iraqi petroleum industry was shaping up, according to published plans by the oil ministry and guidelines recently given by interim Prime Minister Iyad Allawi to the newly formed Supreme Council for Oil Policy. The council is in the process of finalizing a new policy which will be submitted to the cabinet for approval, he said.
Issam Chalabi, who had just taken over as oil minister when INOC was dismantled,
said the company "did a great job" from the time it began operating in
1968 as a result of its financial independence and the powers it enjoyed. There
was no point resurrecting it unless it enjoyed similar independence, he said.
Saadalla al-Fathi, an oil consultant and one of the panellists, said Iraqis should primarily rely on themselves to rehabilitate the oil industry, as they had done in the past, given that waiting for external aid had resulted in "nothing being done." But he said other countries could help by offering Iraqis education and training.
"All countries in the world want to train our police and our national
guard... But I didn't hear one country saying we will take 20 Iraqi
students," Fathi said.
Iraq is now producing about 2.4 mm bpd of crude but has to import gasoline
and other products despite the fact that it sits on the world's second largest
reserves, estimated at 113-to-115 bn barrels, with probable reserves topping 200
bn barrels, panellists said.
Source: Business Report