By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Service Contracts Vs Production Sharing Contracts Revisited
Debating the performance of the service contracts and viability of production sharing contracts as alternative seems to reenergizes lately among Iraqi professionals; this is prompted by few reports in international media sources coupled with reported domestic hints and a complete silence of the Ministry of Oil.
Personally, I received requests from Iraqi parliamentarians, from members of local councils/governments in significant oil producing provinces, and from professional colleagues. These requests focused on three main issues:
- The performance of the Long Term Service Contracts-LTSC concluded by the federal Ministry of Oil-MoO; The incurred cost of upstream development under these LTSC;
- The comparison of “service cost” under these LTSC against the corresponding cost under Production Sharing Contracts-PSCs;
- The Constitutionality and legality of both modalities: LTSC and PSCs.
The purpose of this intervention is to address the above issues, which I have shared already with the requesting colleagues. Also, I had, in many previous occasions, dealt at length with matters pertaining to these issues. Thus, I will attempt here to provide an update and further insights.
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).