Former Iraq Oil Chief Blasts Baghdad’s New Crude Deals

Amman, 31 May 2010 - Dow Jones

The former head of Iraq’s largest state-owned oil company and advisor to the country’s oil ministry has criticised deals Baghdad signed with international oil majors to develop some of its biggest fields.

“There is no clear national plan on how to develop these huge oil fields,” Jabbar al-Luaiby told Dow Jones Newswires in an interview.

BP, Royal Dutch Shell and Cnooc Ltd, Exxon Mobil Corp and Italy’s Eni Spa. (ENI.MI) have bagged deals with Iraq to develop fields in the war-torn country, which holds the world’s third-largest proven oil reserves after Saudi Arabia and Iran, according to BP.

Al-Luaiby’s remarks could increase pressure on Baghdad to revise contracts awarded to foreign companies. Ayad Allawi’s Iraqiya bloc, which won the most seats in the recent parliamentary election, said it would like to review oil contracts signed with the majors.

“They’re huge deals that need the infrastructure, the potential and management which Iraq is currently lacking because of years of war, economic sanctions and destruction,” said al-Luaiby, who recently left his position as an advisor to Iraq’s oil minister.

Al-Luaiby added that international oil companies can still play a part in tapping Iraq’s vast resources once better infrastructure and oversight is in place. Foreign investment could help reverse the impact of two decades of war, sanctions and neglect on Iraq’s oil industry.

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