Shatha Khalil *
The Iraqi Oil Ministry is experiencing a clear tangible progress in its performance since an independent oil expert Jabbar Laibi has become its minister, which reflected positively on the Iraqi economy.
The ministry is working with scientific studied steps to cope with difficult economic and financial challenges faced by the country, and the advancement of the real development of the economy, and planning to increase fiscal revenue for national companies, and the formation of boards of directors of companies that have the necessary powers according to law No. 22, and to sign the agreements, or partnership contracts with its Arab and regional and international counterparts in accordance with the laws and regulations.
Laibi said that the ministry will not accept losing companies at the end of this year, and will strive to overcome the obstacles it faces , noting that in 2018 will see success in all of the companies of the Ministry of oil .
He stressed that privatization will not be applied at once but will be applied in stages “, expressing his belief that it is a “very urgent step, and it is important to improve performance in fuel stations and infrastructure facilities for the marketing of oil, which contributes to the development of the energy sector.
The minister said in his participation in the forum of Petersburg on the first of June that the Russian companies are invited to contribute to the reconstruction of Iraq, especially the energy sector, adding that the revision of oil production agreement depends on the outcome of the monitoring committee of oil-output cut in OPEC.
Al- Laibi hoped the continuation of the agreement so that it can raise oil prices, revealing that “there is a meeting of the committee in the next month of July, and that will see if there is a need for the revision.”
He added that there are a number of factors contributing to the decline in oil prices, most notably a stock of three million barrels of oil per day in the OPEC countries, and increase the production of shale oil in the United States, hoping the reduction of the stock and then the rise of oil prices.
Laibi pointed to the existence of coordination between his country and Russia on the issue of oil prices, and that there is a direct coordination between the two sides, adding that he contacts continuously with Russian Energy Minister Alexander Novak and there is an agreement on price, and Russia have the desire in coordination with OPEC and there are common interests with the organization , and shared visions in this area ,
and he stressed on the sidelines of the energy conference in Baghdad on planning to increase the capacity of crude production to 5 million barrels per day before the end of 2017, and that “Iraq will continue in parallel with this the exploration plans to increase its reserves by about 15 billion barrels in 2018 to reach 178 billion barrels, indicating that “plans to increase productive energy now from the existing fields include a plan to inject sea water. ”
The Iraqi oil minister predicted , on the sidelines of the Forum of World Economic Petersburg , a recovery of oil prices in 2018 in the light of the extension of states «OPEC» and abroad the agreement of the reduction of production for 9 months to come , and help to stabilize the market.
The Iraqi Prime Minister Haider al – Abadi supports the process of reducing oil production to reduce the surplus in the global market and the extension of the reduction of the production in line with any decision taken by the “OPEC” organization.
The oil minister said that «OPEC is ready to intervene if oil prices fell sharply. » The «OPEC» and outside the countries reached at the meeting, on November 30, to the agreement requires reducing the size of its oil production by about 1.8 million barrels per day, starting early in 2017, while countries outside the Organization agreed that the volume of the total reduction of oil production 558 thousand barrels per day, of which 300 thousand barrels from Russia.
In the same context, Russian Deputy Prime Minister Arkady Dvorkovich said he did not believe that the global agreement to cut oil production will change if crude prices fell, adding: «If prices went down I do not think we will amend the agreement». In addition, the Russian oil giant company Rosneft agreed to explore and develop five fields in the Kurdistan region, in its quest to become a major player in one of the latest oil and fastest growing regions in the world.
And signed with the KRG production sharing agreements for five concession areas, indicating it would target gas exploration also in the future ».
Chief Executive Officer of Rosneft and one of the closest allies of the Russian President Igor Sechin said that « the company expands cooperation with the Kurdistan after it has signed earlier this year funding agreement in advance to ensure the Kurdish oil sales to refineries of Rosneft in Germany.
The “OPEC” aspires to cut global oil inventories to an average of five years, but faces difficulties so far in achieving this, while stocks hovering near record highs partly because of increased production in the United States, which is not involved in the reduction agreement.
Here Laibi confirms on his determination and his insistence not to accept the existence of losing national oil companies at the end of the year 2017 directing the national oil companies to exert utmost efforts in order to improve performance and increase financial revenue level in support of the national economy.
He noted , “The body of opinion in the ministry decided to reject the existence of losing oil companies under any excuses or justifications in the light of the difficult economic and financial challenges and circumstances facing our country, and that the ministry urged companies suffering a decline in financial revenues , such as ” oil tanker company, Engineering Equipment , Inc. Iraqi drilling, Inc. oil projects, the company of the distribution of petroleum products, the filling gas company , and company of marketing “oil” , to work to address this in a maximum period of the end of 2017
And Laibi stressed ” the need for the boards of companies that possess the necessary powers according to the law No. 22 – , to take practical steps and intensify its efforts in communication and dialogue with the Arab, regional and international counterparts leading to effective solutions and correct options to make the partnership agreements with these companies in accordance with the laws and regulations in force, to ensure the upgrading of performance and staff development level as well as an increase in financial revenue “and noted that ” the leadership of the oil sector will support and enhance all the good steps and efforts that serve in this direction.”
The Minister of Oil added: “The joint investments between national companies and international counterparts will contribute to the advancement of the level of performance of national companies and upgrade them to the ranks of discreet international companies, strengthen its position on the map of the implementation of large projects and the achievement of planned objectives.”
Al-Laibi added: “The ministry has taken practical steps in this direction through a partnership agreement between the Iraqi Oil Tanker Company and Arab Company for the transfer of oil, as well as the conclusion of a contract between the oil marketing company” SOMO “and one of Russian company for joint marketing of Iraqi oil and the development of the performance of employees.
He stressed Laibi on “the need to take the boards of directors, noting that” the leadership of the oil sector will support and support all the steps and the good efforts that are in this direction. ”
The minister refers to the ministry began to take practical steps in this direction, a partnership agreement between the Iraqi Oil Tanker Company and the Arab Company for the transfer of oil, and the conclusion of a contract between the Oil Marketing Company (SOMO) and a Russian company for joint marketing of Iraqi oil and the development of the performance of employees. ”
According to a statement on the Iraqi Oil Ministry website, the deputy of the ministry for the extraction said , it plans to raise the export capacity of the port of al-Amaya in Basra to more than one million barrels per day, noting that Basra oil company is currently conducting rehabilitation and development of the port of al-Amaya; to get great rates, and that current” energy of the port the amount of 250 thousand barrels per day, and we are working to end the projects of laying of new pipeline and the establishment of pumping stations and reservoirs to more than 600 thousand barrels during the coming period. ”
The plans of the Iraqi Oil Ministry to raise the production capacity of the Allhis oil field in southern Iraq to about 120 thousand barrels per day over the next few months, noting that the Allhis field was discovered in 1961, and is supplying the national grid for electric power generation with gas, a capacity of 35 million standard cubic feet per day
and that current energy throughput of the port Allhis of about 100 thousand barrels per day, Iraq plans to increase crude production capacity to 5 million barrels per day before the end of this year.
It is worth noting that the Iraqi oil production has been increased during the current year of 36%, compared to its production in 2014, and the size of the Iraqi oil reserves rose in February 19, to 153 billion barrels.
Economic Unity
Rawabet Center for Research and Strategic Studies