An audit of Iraq's oil revenue management and accounting system found the plan to fully install and calibrate a full crude oil and products metering system by 2012 is only 39% complete, according to a report from Platts.
US auditing firm PricewaterhouseCoopers, the UN mandated International Advisory and Monitoring Board, and Iraq's Committee of Financial Experts, all criticized the pace of the metering system.
According to the statement by IAMB, which since 2003 has been in charge of keeping track of Iraq's oil revenues, a review of the 2010 audit "continues to highlight issues of concern regarding weaknesses in controls over oil extraction and in the spending ministries."
The Committee of Financial Experts, due to take over control of the watchdog role when the UN mandate -- and parallel protection of Iraqi funds from creditors -- expires on July 1, said only 51% of the 2009 and 2010 metering plan was accomplished, "despite its importance for controlling the produced quantities to reduce the diversion of unjustified loss."
Iraq has reportedly earned $22 billion in oil sales so far this yeart.
UK-based Kelton Engineering has been hired as a consultant and adviser to the Oil Ministry, a move praised in the PWC report. That report said there is a lack of third party inspection and authentication of shipping documents by the State Oil Marketing Organization (SOMO), nor are there "system generated loading reports in the shipment file."
It concluded: "Due to the fact that the comprehensive metering plan is not yet fully implemented at the extraction and storage facilities, the petroleum and petroleum products quantities cannot be reliably measured."
It said that of the installed meters, they are not being used properly, and there are no meter versus meter checks and balances.
(Source: Platts)
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