Oil Cos in Basra Caught in Political Crossfire

A leading figure in the bloc, Ahmad al-Sulayti, said that, "The previous governor of Basra belonged to the prime minister's central bloc; for that reason, the city's role in the process of concluding contracts with foreign companies was extremely limited since the former governor gave up that right to the prime minister."

In his comments to Al-Monitor, Sulayti added that, "The Iraqi constitution contains an explicit provision according local governments the right to share in the administration of the oil fields discovered before 2005, when Iraq's permanent constitution was being written. This has not happened in Basra," he said, stressing that, "The local government in Basra has not been given any role worth mentioning in the process of investing in oil fields; Baghdad has taken an exclusive monopoly on the entire process."

He continued, “We are determined to establish a special legal committee in order to enlarge the authorities of the local government.” He added, “We are considering returning to the federal courts in the event that the central government insists on hamstringing our authorities, particularly as regards the administration of those [oil] fields that were present at the time of the constitution’s writing. ... Article 112 of the constitution stipulates that the administration of these fields is to be shared between the central and local governments. By virtue of the strategic context for improving oil production, the authorities are to be shared; but for the fields that were discovered after 2005, their administration is to be solely in the hands of the local government, according to the constitution.”

Sulayti noted, “The central government is seeking to monopolize the administration of oil manufacturing. This is simply unacceptable, for it will have a negative effect on the province.”

Sulayti stressed that the Hakim bloc that has taken power in Basra’s local government “supports the development of oil manufacturing and attracting stable oil companies to the area.” However, he continued, “We also support the provincial government in establishing service and development projects. [Nearly] 80% of Basra’s territory lies outside the control of the local government, due to claims that it is oil territory. This prevents the local government from completing its economic and residential projects. ... The local government must be present when oil contracts with foreign corporations are signed, so that the rights of local inhabitants can be guaranteed.”