On October 18 Oil Minister Jabbar al-Luabi announced that nine-state owned companies involved with the petroleum industry would be transferred to the new National Oil Company. This is part of the government’s plan to make the Oil Ministry into a strategic planning body, while the National Oil Company would be involved with implementation and day to day operations.
Earlier in the year parliament voted to re-organize the
country’s oil industry. On March
5, the Iraq National Oil Company (INOC) was revived. It had not been
in operation since the 1980s. The INOC
would run the main state owned companies involved with oil and carry
out the major operations such as production, marketing, etc. Minister Luabi’s
action in October was the first step in that process. The State Organization
for Marking of Oil (SOMO), the Iraqi Oil Exploration Company, the Iraqi Drilling
Company, the North, Midland, Basra, Dhi Qar, Maysan oil companies, and the
Iraqi Oil Tankers Company were all placed under the INOC. In turn, the National
Company is supposed to answer
to the cabinet instead of the Oil Ministry. Luabi was named
the head of the INOC, and will shift to that job full time when a
new cabinet and Oil Minister is introduced by Premier designate Mahdi. This is
meant to free up the Oil Ministry to make plans for the country’s energy
industry.
There is one possible obstacle to fulfilling these plans,
and that is the institutional objections that may arise. Iraq’s ministries never
like giving up the power that they have amassed. That could happen with the Oil
Ministry that might set up roadblocks to the INOC or find new ways to continue
with some of the jobs that are now being stripped from it. There is a precedent
for this in the recent past. During the U.S. occupation the United
States attempted to make the Finance Ministry the primary body
responsible for the budget and make the Planning Ministry more of a strategic
thinking body. That never happened as the two constantly battled for control of
not only the budget, but planning, spending and projects. The same thing could
happen between the Oil Ministry and the new National Oil Company.
SOURCES
AIN, “Parliament
votes on the draft law of the National Oil Company, 3/5/18
Kullab, Samya, “Luiebi named head of new national oil
company,” Iraq Oil Report, 10/10/18
- “Q&A: Ibrahim
Bahralolom, MP and former oil minister,” Iraq Oil Report, 3/7/18
Reuters, “Iraq transfers ownership of nine state oil
companies to new National Oil Company,” 10/18/18
Savage, James, Reconstruction
Iraq’s Budgetary Institutions, Coalition State Building after Saddam, New
York: Cambridge University Press, 2013
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