Proposed INOC Law could Disintegrate Petroleum Sector

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Proposed INOC Law Could Disintegrate Petroleum Sector and Damage the Iraqi Economy

At short notice I was asked to give opinion on the text of the proposed Iraqi National Oil Company (INOC) Law, which is expected to be discussed by a few people in a “consultative meeting” at the Ministry of Oil today Wednesday 16 March 2016.

I examined thoroughly the above mentioned text and provided my initial assessment to all senior officials at the Ministry of Oil; the Parliamentary Committees for Energy & Oil and Finance and some oil professionals who were invited to attend the “consultative meeting”. My remarks were posted to the above mentioned individuals and officials at 03.00 AM (Norway time) this morning 16 March 2016.

Due to the urgency of the matter I posted my brief assessment with detailed remarks written on the Pdf copy of the said INOC Law. I will publish my full assessment of INOC Law shortly.

Briefly, in my humble view there are many extremely serious problems, flaws and inconsistencies in the laws, which could generate many negative consequences that could disintegrate the petroleum and upstream sector and on Iraq economy.

The proposed Law mixes and confuses authorities by giving an upstream petroleum entity, INOC, a fiscal authority of macroeconomics nature, allocation of revenues!

It ignores the necessary and constitutional separation of the three branches of authority and their jurisdictions and prerogatives.

By attaching INOC to the Parliament, the Law violates the principle of Natural justice: the conflict of interest.

One Response to Proposed INOC Law could Disintegrate Petroleum Sector

  1. Ahmed Mousa Jiyad 22nd March 2016 at 23:20 #

    INOC Law: update and follow-up
    Things, nowadays, look confused and fuggy at the Ministry of Oil and the Parliament; and most certainly this is the case for the INOC proposed draft law.
    A draft INOC Law (among other related old and proposed laws) was posted to selective domestic participants, including Ministry and Government Officials, Parliamentarians and oil professionals, who were invited to attend the regular MoO monthly consultative meetings initially scheduled on 12 March then postponed to 16 March. As mentioned earlier I was asked to give opinion on the proposed INOC Law, which I did. Moreover, I shared the same within my professional network and post my feedback on IBN,
    Few hours before the commencement of 16 March meeting, I received an email from the Ministry of Oil stating that the circulated draft INOC Law has nothing to do with the Ministry. That proposed INOC law seems to represent, as confirmed latter, a personal view proposed by a retired ministry official.
    The questions are how come a personal view was disseminated, formally, by the preparatory committee for the Ministry’s monthly consultative meetings? Who is responsible for such unusual intrusion to formal and official meetings? And why that was not discovered until the commencement of the meeting?

    Those attending the 16 March consultative meetings were informed that the Ministry of Oil will today present its INOC Law, not the circulated one. In fact one of the independent experts, while giving his views on the circulated text, was told that the meeting is to discuss a different draft; he stopped talking and left the meeting in dismay and anger.
    The Director General of the Legal Directorate at the Ministry outlined, in a PowerPoint, the main contents of INOC Law; which is very different from the circulated text.
    Three participants in the said meeting wrote to me confirming the above; and one of them writes, “This was just preliminary meeting , …, they [at the Ministry] are proposing other meetings till they approach the maturity of adrift.”

    In a surprised move a third, deferent from the other two, INOC draft law was reported to be tabled for the first reading before the Parliament at 11.00AM (local time) on the following day- 17 March. One of my three contacts writes at 10.00AM on that day, “Information indicates that the draft law was withdrawn”.
    However, according to the record of the debate for that day, the Parliament President gave instruction to send formal letter requesting the Government to clarify its position on the draft of the tabled law and whether the Government has final draft of the law or not.

    Three different texts for INOC Law reflect a state of unhealthy chaotic situation: leaving the first personal proposal aside, for lack of credibility and formal standing, the other two drafts (by the Ministry PowerPoint and by the Parliament) are not carefully thoughts. Both proposals replicate 2007 thinking and the “Package of Laws” that marked the demise of the federal oil and gas law; back to square one!.
    But this issue deserve further consideration and analysis, which I might address latter.

    Ahmed Mousa Jiyad,
    Iraq/ Development Consultancy and Research,
    [email protected]

    22 March 2016