By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
The Finance Committee of the Iraqi Parliament: The Need for More Accuracy and Better Transparency
The Finance Committee of the Iraqi Parliament sent formal communication/ letter (number 738 dated 8 October 2015) to the Minister of Finance regarding “Export of Southern Oil”.
The FC Letter refers to “statistics on oil export volume according to production areas” that was done by the “research department” of the Parliament.
The following is the translation of FC Letter contents:
- Total export from the southern oil during the first nine months of this year was 755 million barrels; giving a monthly average of 83.8 million barrels and total production of 1005.6 million barrels for the entire 2015. This total represents oil production by “national efforts” and from “bid rounds”;
- Total export from the southern oil during 2007, before bid rounds, was 556 million barrels; hence the difference is 449.6 million barrels;
- If the “price” of the southern oil is $40 a barrel, then what we get from the bid rounds in 2015 is: [40*449.6=17984] million US dollars;
- It was mentioned during our meeting with you [4 October 2015] at the Finance Committee that IOCs due entitlements for the bid rounds is $21 billion in 2015; meaning we pay ca. $3billion more than what we earn from these bid rounds.
The Letter ends by requesting clarification from the Minister and what he is going to do in addressing this matter for this year and forthcoming years.
Unfortunately and regrettably, the above submission by the FC suffers from very serious inaccuracies, factual errors, lack of information and knowledge of the main contractual provisions governing the bid rounds and confused understanding of the nature of upstream petroleum development.
Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: [email protected], Skype ID: Ahmed Mousa Jiyad).