Bill national oil company, would it be a reason for the loss of Iraq's wealth for future generations?

2016/8/10 16:49

[Oan- Baghdad] achieve: Amjad Abbas

"We fear problematic about who decides the ownership of Iraq's oil?" Scary question raised by the Minister is earlier about a leaked draft of the Law of the Iraqi National Oil Company to be sent to the Council of State.

Where the implications of the draft law, which ended the Oil Ministry has recently written and received by all of Iraq [where] on a preliminary version of it will be the ministry revised version to the State Consultative Council during the month of August / August 2016 and who carried the controversial paragraphs raised, according to polls replies rejecting his acts and other pro conservatively, especially with regard to being a joint stock company controlled what in the ground and above and in the continental shelf of the oil and gas facilities under, which raises fears of a constitutional violation respect the independence of the oil wealth and distribute it to all Iraqis equal footing and it's not linked to a particular generation.

Reduction of oil ownership

He described Raed Fahmi, Minister of Science and Technology, former project that will collide with the problems, including the difficulty of accepting the Kurdistan region to be management and export fields by the Iraqi oil company, in addition to the work of foreign companies that might oppose working with this national company. "

Was concerned that the reduction of Iraqi oil ownership of certain of minors by clergy "because the administration and control of the company depends on the stocks, industry is when the decision will be who has the most shares, and therefore there will be problematic about who decides the ownership of the oil."

He continued: "Maybe under subcontract there is a sale of shares by the agency, and the mechanism of Iraqi oil will come out of the Iraqi administration," noting that "the bill, a formality that respects the constitution, but fundamentally disagrees with him."

He stressed the need to Fahmi, said that "the company introduced a draft law of public opinion and that there be a complete knowledge of the law, because the value of shares amounting to 100,000 dinars are worth nothing to the value of the oil if it was managed properly."

According to the draft law, Article 2 of the project, remember that it establish a public shareholding company called [Iraqi National Oil Company] and shall enjoy the moral and represented by its President or his nominee, identified as article [3] that the company be owned by all Iraqis, and the article [ 4] be the company's nominal 10 trillion Iraqi dinars capital [up to 8.4 billion US dollars.

And identified the material [6, 7 and 8 of the law, the number of nominal shares of the company at 100 million shares, with par value per share to be in the amount of 100,000 dinars, or the equivalent, and gives every citizen holds Iraqi citizenship [shares only one of the company's shares.

According to the latest statistics of the Ministry of Planning announced by the July 16, 2016, the population in Iraq has 36 million people, meaning that 36 million shares, 36% will be granted to citizens, and the remaining 64 million shares, 64% put to the IPO and are sold to the Iraqis exclusively on It should not be salable or heritage in any way.

Restructuring of the oil sector

To that found former oil minister, a member of the Parliamentary Committee on Energy Ibrahim Bahr al-Ulum said the new draft law to the National Oil Company, "one of the restructuring of the oil sector requirements properly and correctly."

He said: "This is one of our demands, a long time ago, and today there is no law but the ideas for discussion presented by the Oil Ministry with members of the legislature and specialists, and these ideas that discuss possible later that through which the formulation of the law takes its final form after approval by the Council of Ministers and then up to Parliament for legislation. "

He noted that "the thing basically in the bill, is said to be a contribution to the company by the Iraqi people, and that is based on the Daamtin, Malkiya wealth to the Iraqis, and be funded by the state needs."

Iraq and embarked on the fourth of September 1967 the founding of the Iraqi oil company code number [123] who considered money the Company and owned by state funds, and select the purpose of the work inside and outside Iraq in the oil industry in its various stages, including the investigation and exploration of oil and material hydrocarbon natural production, transfer and filtering, storage and distribution and manufacture of materials or products mentioned or Mstkhrjatha its organs or petroleum chemicals and related industries and trade in all of these materials.

And to prevent the company's contract law on investment of any region allocated to the company's regions by signing up with foreign companies, but the Revolutionary Command Council dissolved its resolution No. (267) in 1987 canceled the establishment of this company and inflicted the Ministry of Oil, has been canceled by the General Establishment for oil center and the two institutions plenary for oil North and South, which founded the company, and introduced the two north-south oil.

Final draft

The confirmation of the existence of this draft, which was leaked, general manager of the legal department at the Ministry of Oil, he said, "have been prepared the final draft of the bill that the Iraqi national oil company, as the ministry has made great efforts and many hours of work to prepare the draft."

He added, "This new draft will be sent during the month of August / August this to the Council of Ministers for approval by him and Sir legislative procedures and review of both the State Council or the Council of Representatives for approval."

"The draft law defined that the company will be the contribution of the latter and the decision of the Council of Ministers and the House of Representatives and others express their views, as the company will be owned by the Iraqi people and every citizen has only one share," pointing out that "the idea of ​​giving one share for every citizen are to the ministry based on Article 111 of the Constitution. "

Shahir He continued: "The government will pay the amount of the stock, which is not specified price until now, will be according to the company's capital, which needs approval by the Ministry of Finance, and we can now declare".

He denied the existence of IPO for the company's shares, saying: "There is no subscription is strictly controlled by the owners of capital to the company, the shares are not sold or bought and governed by the existence of man when he is born, it owns and has no right to sell or dispose of them and ending his ownership of his death."

On the question of the automatic granting of the remaining shares other than shares of citizens, he replied Shahir: "Oil and gas by virtue owned by the constitution to the Iraqi people and the company it represents, which manages oil on his behalf, so doing, we apply the Constitution of ownership, as every citizen may not be acting in the oil."

And he went on: "The company is vested in the people running the oil and gas property, and the people is owned, neither the state nor the government, and this will not be running afoul of the Constitution, without revealing the mechanism by which will be selling the remaining shares by up to 64% of the shares of the company."

And on the status of foreign companies operating in Iraq after the establishment of the national oil company, he said: "We are linked contractual relationship with these companies and these contractual relationship is the law of the contractors and Iraq are respected and trying to develop and expand cooperation with the contracted and non-contracted companies."

He added: "We call for the development of the oil industry and the introduction of foreign companies on an ongoing basis to take advantage of their expertise, technologies and good management of the oil industry without means loss of national control over the oil industry, especially the extractive."

It owns the oil ministry for 18 companies, according to the bill's national oil company, will join all with these companies, which are companies [Midland Refineries, Southern Oil, the distribution of petroleum products, the center of oil, the North Oil, oil pipelines, Iraqi oil tankers, general Heavy Engineering Equipment , oil marketing Sumo, refineries North, North gas, oil exploration, oil projects, Maysan oil, Iraqi drilling, South gas, gas filling, refineries south.

Project of law

Article 9 of the bill that indicates "the federal government is to pay the nominal value of the shares to the company's citizens are dividends paid by the subscriber, while stocks are considered unpaid unsubscribed."

The show material [10, 11, and 48 of the proposed bill, said the company "the natural resources of all of the oil and gas has in all the regions and provinces, and the exercise of its operations related to the production of oil and gas in the Iraqi territory, including land and submarine waters and below in all parts of Iraq, In the continental shelf and in any part subject to Iraqi law under an international agreement or international norms. "

According to those articles to the "disengagement NOC and the south, center and Maysan companies explorations and tankers of Iraqi oil and the ports of the Ministry of Oil and owns the National Oil Company of Iraq without allowance recorded at carrying amounts, also conveys the company's rights and obligations, assets and employees of these companies are businesses."
Differing legal opinions

For his part, professor of constitutional law, former member of the parliamentary legal committee gentle Mustafa "The economic philosophy of Article 111 of the Constitution shows that it may not be the monopoly of oil and gas by the people and that they may have the majority in the shares of the national oil company, so if it does not address the issue of monopoly in the law, may be challenged before the Federal Court as incompatible with the philosophy of the oil belongs to the people. "

And semi-attempt approval of the law to "circumvent the Iraqi people through giving him the shares and only one of his ownership in the oil, while the majority of the shares go to the people to turn this oil into the machine, however, the referees use it as they want and buy it Receivables people and then be deducted taxes from them."

But the legal expert Tareq Harb had a different view about the bill, and believed that "the foundation of the company and make a contribution which is not state a constitutional violation, where it can be for any Iraqi citizen to get these shares, indicating that this bill can be passed by a special law regulating the affairs IPO of incorporation and the profit and loss and that depends on the government companies Law No. 22 of 1997, which regulates all the provisions of the companies. "

"The law is not in contradiction with the provisions of the oil and gas law set by the Constitution Article 111, which, and this law can cancel or company to keep it, because the law if passed him the power to cancel any entity from the oil companies."

And found it "very difficult law agrees with the Kurdistan because the province there are problems about the management of oil and principles of how the exploration, transportation, export, and this is a complex issue because the province wants to be the oil for him, and even the federal government does not know the oil produced in quantities not realized revenues from the export and even to from being sold. "

And select the bill, "the company's objectives in Article [16] First, to be a property of actual both natural sources of Anaft and gas for all Iraqi people in all regions and provinces according to the Constitution, and secondly: to promote the unity of Iraq through direct ownership of Iraqi citizens and natural resources of oil and gas, Sixth: the consolidation and strengthening of the democratic system in Iraq through the transfer of ownership of oil and gas resources of the government to the people, and the Seventh involve the governments of the regions and governorates not organized province in the management and direction of the oil and gas production operations within its borders, and eleven: achieving high rates of annual increase in the volume oil and gas production in order to maximize productive goal and sustain over the long term. "


In contrast description Zuhair al-Hassani head of the Iraqi Institute for Economic Reform experts, the bill's national oil company that is contrary to the Constitution, because it is inconsistent with the sovereignty prescribed under Article 111 of the Constitution.

He said that "the draft law by the case, is to try to control the oil resources and national wealth by the private sector."

He added that "the bill, even if initiated in the House of Representatives, will be undone by the Federal Court, as he was wrapping on the sovereignty of the state of national wealth that belongs to the people."

She Saw "The attempt to give the private sector and wealthy means the privatization of the oil sector, and there is no privatization of this sector in the State of the States at which the oil wealth with the exception of the United States of America."

Al-Hassani said he believed that "it is better re-work the law of the Iraqi National Oil Company, No. 123 of 1967 and the abolition of the Revolutionary Command Council resolution [dissolved] No. 267 for the year 1987 by merging with the Ministry of Oil."

He added: "We do not need a new law, and the best re-work the old law, because before the bill does not provide for industry crossover, while the first provided by law, and now we are in dire need of manufacturing industry to find a non-oil revenues resulting from the export of crude resources." .

For his part, economist said Bassem Jamil Antoine, that "Article 111 of the Constitution confirms that the oil belongs to the people of Iraq, all without exception, so far, the oil and gas law did not pass under the Constitution, which emphasizes the enactment of this law, and if the enactment of the national oil company before the oil law and gas, that is a constitutional violation, which requires a constitutional amendment. "

He said that "We must determine the subscription rate of 20 million shares, in order that not obsessed by the big capitalists and have a share of the middle classes, staff and others from this company."

The division of oil work

The director of state oil marketing company SOMO] Falah Jassim al-Amiri, says that "the Iraqi oil company law divides work in the oil wealth, and that the extractive issues most would be for the company, as will be the function of the ministry building strategies and monitor the company and interface for Iraq in the oil sector."

He added that "the company will have an independent budget, taken from the oil, if oil price of $ 50 must be determined from 10 to 15 dollars for the company and the rest goes to the state, where the budget is on a par with the state budget."

And on the work in the oil fields of foreign oil companies, he explained that "the engagement of these companies will be the national oil company and there is no problem and objections by these companies on the establishment of an Iraqi national oil company."

They gave article [18] of the law, "the powers of the company, including a review of agreements signed between the Ministry of Oil and corporate non-Iraqi and enter into new negotiations with service contracts in order to amend these agreements or replaced, and give them the right to establish wholly-owned companies assume the operational processes in the regions and provinces, as well as the establishment of an Iraqi contribution of oil services companies with the participation of the Iraqi private sector, owning and possession of all movable and immovable property of the land and property, buildings and equipment, and any other assets required to carry out its functions, and giving donations and aid to the Iraqi authorities and non-Iraqi. "

According to the Organization of Petroleum Exporting Countries [OPEC], which last year announced 2015 oil reserves rates certainly the Petroleum Exporting Countries, the oil reserves of Iraq has 143 billion and 400 million barrels of oil, the fourth-highest oil reserves after Venezuela, Saudi Arabia and Iran, but oil experts in Iraq They believe that the size of the reserve doubles the number is much anticipated. "

The project shares

As for the oil energy parliamentary member Kaveh Mohammad, he said that "the national oil company law is important and sensitive, and the Commission, in principle, with the enactment of the law, but we must be careful that have actually oil and gas, however, the Iraqi people, and there is no monopoly by people or certain companies It has affected the citizen. "

He expressed his rejection to the proportion of stocks in the bill that raises IPO, citing his refusal to "beware of the monopoly of oil and gas by the people and focus on the imports come for the benefit of the Iraqi people."

He stressed the need that "there will be synchronized between the enactment of the oil and gas law with the legislation of the national oil company, because there are materials related to the relationship between the center and the provinces and territories in Tharwat management of the oil."

Previous laws have failed to materialize

And confirms a former member of the Commission on oil and energy parliamentary Bayazid Hassan, said that "the most divisive on the establishment of the Iraqi oil company points, is that the Kurdistan region wants to have the [Kurdistan oil company, and the company's own province located in the draft raised the region's oil law."

He said that "the region objected to this will be the company's branch of the Iraqi oil company, and that's OK Iraqi constitution, considering that Iraq's federal system and prevents the concentration of all powers, whether oil or executive or legislative, in the center and must be distributed to the provinces and territories."

He pointed out that "there are three drafts of the law of oil and gas was read in parliament, the first in 2007, second and third in 2012, and all the drafts contain a substance forming a national oil company because this company had previously existed, but to be a public company belonging to the government and linked to the Ministry of Oil, not a joint stock company. "

The company's capital

And refers Hamid punitive president of the International Federation of businessmen in Iraq, to ​​"be raised in the bill about the company's capital of 10 trillion dinars, does not equal the amount of the development of a single oil field, and this is contrary to the reality, because the company's share capital must be equal to what is owned by the company from companies the Lands and equipment, mechanisms and affiliates, in addition to crude oil in the country and estimates that can be extracted in the short and long terms. "

It contains Iraq - according to geological - studies on about 530 geological give strong indications of how a massive oil.

It did not dig these structures only 115 of which 71 proved to contain vast oil reserves distributed in many fields.

The Iraqi discovered fields, 71 fields and did not take advantage of them only 27 fields, including ten giant.

The concentrated oil and gas fields are currently producing in the provinces of Basra and Kirkuk, and followed in the important provinces of Maysan, Baghdad, Salahuddin, Diyala and Nineveh fields.
The fields are not discovered and developed are found in most of Iraq's provinces except four are Qadisiyah, Babil, Anbar and Dohuk.

Among the punitive that "very little value stocks for the economic situation experienced by the country and inflation is happening in the market, in addition to that our dependence on oil in the state revenue and still constitute 67% of GDP and 92% of the fiscal revenue reaches of the state by the oil and 95% of foreign currency. "

He said that "giving 40% of the annual net earnings of the company resulting from the export of oil and gas, to the federal budget is not enough at all, because adoption is currently the budget and during the previous years on oil exports amounted to more than 90%, and this is what is threatening to impose new taxes on citizens to fill the budget deficit. "

The law defines Pmadtah [40, 41], "the distribution of annual net revenue percentages, first [5%] to the custom to invest in developing and increasing oil and gas production projects Mali head Reserve, and secondly [40%] of the operating budget of the Federal Government, and the third [5%] distributed the producing regions and provinces by their contribution rates in the total annual production of oil and gas, and the Fourth [40%] to a reconstruction fund and development of Iraq for oil revenues to invest for the development of the Iraqi economy and the reconstruction of Iraq, which is found under a special law along the lines of this law, and V [10%] pay cash to shareholders and evenly, while the stated percentages may change the approval of the House of Representatives. "

And punitive saw that "the draft law to serve a specific category does not serve the people," expressing his fear of the people, without being designated by "trying to stretch their hands for the remainder of this single vital sector in the country."

Pending the provision of law to the Council of State and passed to the House of Representatives for approval, the other voices may appear and diagnosed by other flaws in the draft, in the light of these objections may be subject to change over time or be returned, according to what he saw specialists.