By Ahmed Mousa Jiyad.
Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.
Debating SOMO Transformation
New important developments pertaining to or initiated by Iraq's State Oil Marketing Organization (SOMO) surfaced during the last few months; they seemed to be integrated components of what was revealed as SOMO's unstoppable transformation. They are:
- Partnership with IOCs in activities outside Iraq;
- Offering crude oil through regular spot/auction-trading;
- Contemplating oil-hedging and Change of “marker crude” in the pricing formula for Asian market only.
These initiatives could have real, effective and far-reaching consequences in both directions -- positive and negative. Thus, serious, evidence-based and professional debate is urgently needed to address all matters relating to SOMO and its unique status not only for the petroleum sector but also for the entire national economy; signs of discontent with SOMO began to show visibility and generate impacts.
In this brief contribution, our Monitoring, Analyzing and Reporting (MAR) (an ongoing activity covering Iraqi petroleum sector), analyses, first, these new four initiatives and highlights many key questions that have to be addressed and specifies critical issues that require further investigation.
That is followed by discussing transparency, as necessary condition for SOMO transformation, and the paper ends with concluding remarks and suggests the launching of SOMO Transformation Debate and convening a special workshop.
Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.