Iraq Prepares to Amend Existing Oil Contracts

The Oil Ministry referred to the figures of licensing contracts in response to accusations of corruption and claims that these contracts were unfair to Iraq. Former Deputy Prime Minister Bahaa al-Araji announced at a press conference in Baghdad Feb. 21 that a lawsuit in regard to the foreign contracts was being prepared “because they harm Iraq.”

As a result, the parliamentary Finance Committee announced that a fact-finding committee was formed to investigate corruption in licensing rounds. Haitham al-Jubouri, a member of the [Finance] Committee, said Feb. 21, “We have formed a fact-finding subcommittee for the oil licensing rounds, the cost of production and the authenticity of contracts and procedures.”

Meanwhile, Ahmed Hama, a member of the fact-finding committee, told Al-Monitor that his committee “began its work and it has so far held three meetings to review the licensing rounds, which gave foreign oil companies a concession to develop Iraqi oil fields. The committee has several questions to ask the Ministry of Oil and officials in the previous government, such as why the contracts did not take into account the possibility of a decline in oil prices and how the contracts can be amended in order to serve Iraq in the current financial crisis.”

He also pointed out that the fact-finding committee is waiting for “the Board of Supreme Audit reports to reveal the funds being transferred between oil companies and the Iraqi government, as well as reports from the Commission on Public Integrity [CPI] about the complaint made by Araji regarding corruption in licensing contracts.”

The Federal Board of Supreme Audit provides clear statements and reports on the fees the government pays to the oil companies and the profits it makes as a result of the work of such companies. The office also determines the feasibility and viability of such contracts and whether or not they remain profitable for the government.

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