Page 5 - MEOG Week 38

MEOG COMMENTARY MEOG

one public company.” corruption in the country gives rise to great con-
Not pulling any punches, Jiyad concluded: cerns about this concentration of ownership.
“By considering these state sovereign oil export Previous investigations by Middle East Oil
revenues as financial revenues for a public com- & Gas (MEOG) have found that ‘miscellaneous’
pany deprives these revenues of sovereign status, payments in previous accounting periods led to
thus exposing them to all forms of seizure and the government running up an $18bn debt to
confiscation in implementation of any judicial IOCs. In addition, the endemic corruption has
action in any place where the proceeds exist, and led to many international companies refusing to
exposes oil export revenues to many high risks.” expand operations in the country so as not to fall
foul of the law, with ever more scrutiny on pay-
Consolidation ments, with Iraq firmly in the crosshairs.
It will concern observers to note that 10 of Prime MEOG’s original investigation estimated that
Minister Mustafa al-Kadhimi’s closest allies and around $4bn per year had been appropriated by
advisors have been appointed to run banking regional and federal officials, with the invasion
and national security firms. This includes the by Daesh only serving to add greater opacity to
Trade Bank of Iraq, the Central Bank of Iraq and the financial dealings.
various executive branches as well as Ismaael at Amid discussions with various US firms as
the INOC. well as Saudi Aramco ongoing regarding the
As al-Kadhimi consolidates power, he and his development of Iraq’s energy sector, there will
supporters will effectively be in full control of the be no shortage of interest in whether or not the
Iraqi economy. This is not entirely unusual for concerns raised by the original 2018 INOC law
an incumbent government, but the deep-rooted can be resolved by the latest iteration.™

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