Oil Ministry asks IOCs to drop Dubai Offices

By John Lee.

Reuters reports that Iraq has asked international oil companies to save costs by shutting down their prestige offices in Dubai and running their Iraqi operations from within Iraq.

Oil companies with contracts in Iraq have to clear spending with Baghdad, including staffing costs, and are then repaid with income from Iraq's exports of crude oil.

Majors such as Shell, BP, Total, and Lukoil, who all operate Iraqi oilfields, have regional offices in Dubai.

An Iraqi oil industry source told Reuters:

"It is one of the measures taken by the ministry of oil by asking the oil companies to reduce the cost and the number of workers to the minimum level, and shut down the offices in Dubai.

"We don't see there is a benefit of having offices in Dubai, they can come to Iraq with lower cost, because all this are being paid out of the petroleum (service contract) cost."

Another source said the Iraqi Oil Ministry has been deducting the Dubai office cost from invoices paid to oil companies for the past year.

(Source: Reuters)

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