Page 8 - MEOG Week 12 2022

MEOG POLICY & SECURITY MEOG

Iraq’s expansion plans

clouded by INOC vote

IRAQ IRAQ’S ambitious plans to increase oil produc- a “separate corporate entity enjoying financial
tion capacity from 5mn barrels per day to 8mn and administrative autonomy, represented by
bpd by 2027 are under threat amid concerns the president”, it said.
about the Iraqi National Oil Co. (INOC), which With the law for INOC’s establishment not
was reconstituted last year. yet rubberstamped, parliamentarians voted on
The sector has enjoyed a period of recent February 28 to invalidate Abdul Jabbar’s appoint-
growth; however, efforts to involve the state firm ment, casting further doubt about INOC’s future
in major developments were dealt a blow when and, perhaps more importantly, the prospects for
the parliament voted to overturn the appoint- the investments and developments in which it
ment of its president. was to become a partner.
Oil Minister Ihsan Abdul Jabbar, who has The most high-profile of these is a $27bn set
navigated the Ministry of Oil (MoO) through of projects with France’s TotalEnergies targeting
the coronavirus (COVID-19) pandemic while an increase of 125,000 bpd of oil production,
convincing most of its IOC partners not to leave, 600mn cubic feet (17mn cubic metres) per day
was installed as INOC’s president in a move to of gas, 1,000 MW of solar energy and 5mn bpd
underpin his position in the sector and maintain of water supply
continuity into the new parliament. While it is customary for Iraqi state firms to
In mid-2020 the Iraqi Cabinet amended the hold minority shares in upstream projects, these
2018 INOC legislation following objections by are usually 25% or less. However, in October last
the Federal Supreme Court to the law, which was year, Abdul Jabbar announced that INOC would
deemed to be unconstitutional. This saw the cre- take a 40% participation across all of the French
ation of the INOC governing board and advisory company’s developments.
board and the conducting of a valuation of all There have since been various media reports
companies to be moved from the MoO to INOC suggesting that progress on these projects has
authority. been held up because of TotalEnergies’ rejection
Abdul Jabbar instructed the MoO to hand of partnering with INOC.
over control of seven government-owned com- Last month, the MoO denied that any stum-
panies to INOC – Basra Oil Co. (BOC), Midland bling blocks were slowing progress, expressing
Oil Co. (MOC), North Oil Co. (NOC), Dhi Qar “astonishment” about the inaccuracy of a report
Oil Co. (DQOC), Maysan Oil Co., Oil Explora- by Reuters. It alluded to the complexity of the
tion Co. (OEC) and State Company for Oil Pro- contracts, noting that representatives from both
jects (SCOP). sides are “holding continuous meetings” to final-
INOC, which was established in 1966, will be ise terms.™

P8 www. NEWSBASE .com Week 12 23•March•2022