Open Letter From Iraqi Oil Experts To Parliament

Open Letter From Iraqi Oil Experts To Parliament

The following open letter was sent on 5 March to the Speaker and members of the Iraqi Parliament by 61 senior Iraqi oil professionals who have worked in the Iraqi oil industry since the 1960s. The unofficial English translation was provided by the authors.

THE HONORABLE PRESIDENT OF THE IRAQI COUNCIL OF REPRESENTATIVES

THE HONORABLE MEMBERS OF THE IRAQI COUNCIL OF REPRESENTATIVES

Warm greetings,

A few days ago, the Council of Ministers approved the draft of the oil and gas law and it was referred to your esteemed council to discuss it for the purpose of its approval and enacting.

In this respect, we the Iraqi oil experts located outside the country, would like to emphasize the country’s need for a law that organizes the activities of the oil sector and insures the optimum utilization of the oil wealth. But after a detailed review of the draft of the law and its discussions in a seminar held for this purpose in 'Amman on 17 February 2007, it was noticed the existence of many loopholes and ambiguities that should be paid attention to and remedied by your esteemed council for the purpose of enforcing this law in a way that leads to its successful implementation transparently and efficiently and to achieve the highest national interest.

At the same time that we wished that public opinion and the non-governmental organizations were allowed to review the draft of the law, as well as the oil cadres that are specialized in this aspects, to study and enrich it before it is submitted to your esteemed council to discuss its enacting, we would like to emphasize our opinion that there was a rush in its issuance under the present complicated circumstances prevalent in our dear country.

The seminar in 'Amman came out with a package of recommendations; we summarize them as follows:

1. There is a noticeable rush in the issuance of the law in the present time. It is preferred that it should be delayed until the amendments to the constitution, according to Article 142, are concluded, and to give more time to study and discuss it in a technical and professional way, since it is noticed the absence of the contributions of the specialized Iraqi expertise that had the honor of advancing the building of the universally acclaimed Iraqi oil industry, as well as the absence of the opinions of the non-governmental organizations and the professional trade unions in the discussions and enrichment of the draft of the law during the period of its formulation.

2. The support of the directions adopted in the draft of the law for the need to restructure the Ministry of Oil and the reestablishment of the Iraq National Oil Company, with the necessity of taking into account the clarity of responsibilities and the avoidance of dualities.

3. It is noted that there is a clear fault in the structuring of the Federal Council of Oil and Gas and in the Independent Advisors Bureau that attempts should be made to rectify to ensure the efficiency of performance, transparency and high professionalism, especially concerning the emphasis on ”taking into consideration all the entities of the Iraqi people,” which implies the deepening of the quota principles; as well as rectifying the process of selecting the members of the Advisors bureau and their period of service.

4. The necessity of revising the exemption of the processing and the service sectors from this law. It is preferred that they should be included in the present time or endeavor to enact a special law for them in parallel with the care taken to enact the current oil and gas law.

5. Review the authorities given to the Regional Commission to insure its balance with the federal authorities, and to include provisions to ensure the adherence with the federal plan and the unity of decisions; to shut the door on competing foreign companies not to infiltrate the national unity; that review may be considered in the light of the impeding constitutional amendments.

6. We anticipate that the motive behind the issuance of this law is based on the increase of the production capacity through the attraction of foreign investments, in this regards we feel and recommend to plan the increase of the capacity gradually starting with the rehabilitation of the currently producing fields by national effort (Iraq National Oil Company), followed by the development of the giant discovered but not developed, or partially developed fields, and to schedule the priority of their development according to their capacities and development costs irrespective of their geographical locations through service or management contracts with companies possessing the requisite efficiency and technical ability and as the need arises, and to avoid long term contracts with foreign companies in the present time.

7. Continue with exploration activities through the national effort, considering its high rate of success, via self financing or through soft loans, especially for blocks of high probability of success and to limit the licensing contracts, in the forms of exploration, development and production, to areas of low probability of success.

8. Avoid the entry into long term commitments with international companies in exploration, development and production contracts before the provision of suitable security situations to insure that the companies carry out implementation work; and in any case, we recommend that contracts with foreign companies should be submitted to your esteemed council for approval.

9. As for financing, and in light of the gradual increase in production rates for the whole of Iraq, it is suggested that the financing should be principally from the oil revenues and from foreign sources based on deferred payments by oil.

As for the processing and service sectors, it is possible to provide the required capital by entry in joint ventures with local and foreign entities as required.

At the end of this letter we would like to emphasize our readiness to participate in the enrichment of this important law and laws related to it, confident that your esteemed council will deal with it with the patriotic sense entrusted from you and to override the national interest on all other political and sectarian concerns in this difficult and historical conditions that our dear country is passing through, and to work for the delay of this law until it is enriched with the required necessary amendments.

With our esteemed regards and respects,

5 March, 2007

Dr Ibrahim 'Abd al-Karim Rashid	Former DG Oil
Dr Ikram al-Haq Bakir	Legal Advisor
Dr Thamir al-'Uqaili	Former DG Oil
Hazim al-Sultan	Former DG Oil
Hasan Jawad al-Hilli	Former Logging Operations Director
Dr Khalid al-Shimmirri	Economics Advisor
Rajih Muhyi al-Din Yusuf	Former DG Oil
Ra'd Hasan al-'Azzawi	Former Assistant to DG Oil
Dr Riyad al-Dabbagh	Former Dean of University Geological Consultant
Sa'd Allah al-Fathi	Former DG Oil
Samir Kubba	Oil Expert Oil
Samir Zahrun	Oil Expert Oil
Sa'd Salih al-Zubaidi	Former DG Oil
Sharif Muhsin 'Ali	Former DG Oil
Sabri 'Abd al-Razzaq Kadhim	Senior Advisor Oil
Saib Bahjat	Chief of Engineers Oil
Sabah al- Mukhtar	Legal Advisor ‒Oil
Sabah Yasin 'Awni	Senior Advisor – Finance
Dhia Shamkhi al-Bakka	Former DG Oil
Tariq al-'Ani	Former DG Oil
Tariq al-Irhiyim	Oil Expert Oil
Tariq Shafiq	Consultant (Founding Member of INOC) Oil
Dr Tallal 'Ashur Kana'an	Former DG Oil
'Abd Allah Yunis al-Kairi	Former Chemical Industries Advisor –Industry
Dr 'Abd al-Ilah Muslih	Former DG Oil
'Uthman 'Abd al-Baqi al-Rawi	Former DG Oil
Issam Al-Chalabi	Former Minister Oil
'Ali A'jam	Former DG Oil
'Ali Rajab	Former DG Oil
'Imad Muhammad 'Ali Kubba	Former DG Oil
Irfan Zaki Amin	Former DG Oil
'Azzam Bakir Yahya	Former DG Oil
'Abd al-Salam al-Kaisi	Former DG Oil
Ghazi Sabir 'Ali	Former DG Oil
Ghassan Ahmd Rasim	Former Head of Legal Department – Oil
Ghassan al-Hadban	Former DG Oil
Dr Falih Hasan al- Khayyat	Former DG Oil
Falih Muhsin al- Athari	Chief of Department – Oil
Firazdaq al-Haddad	Former Deputy DG Oil
Faisal Salman Ghali al-Timimi	Deputy Minister / Former Geologist Ministry of Industry
Qasim Taqi al-' Uraibi	Former Minister Oil
Qasim 'Abd al-Wahab	Former Chief of Geologists Oil
Qahtan Hamid al-Anbaji	Former Deputy Minister Oil
Dr Kamil al-'Adhadh	Financial Advisor   Finance
Karim al-Shamma'a	Former DG Oil
Kamal al-Qaisi	Economics Expert Oil
Lafta al- Shadhan	Oil Expert  Oil
Luay Muhdhir Bashi	Former DG Oil
Dr Mahbub al-Chalabi	Geological Consultant   Oil
Muhammad 'Ali Zaini	Oil/Economic Expert   Oil
Muhammad Mustafa al- Jiburi	Former Minister of Trade / Former DG Oil
Dr Muhammad Mahmud al- Jiburi	Former DG Industry
Muhammad Yunis al-'Ubaidi	Former DG Oil
Muhammad 'Abud al Sa'adi	Former Expert Oil
Mahmud Hamid Ahmad	Former DG Oil
Mahmud Muhdhir Bashi	Engineer and Former Chief Executive of Organization Oil
Ma'ath al- Fayyath	Expert Oil
Muthanna 'Abd al-Muni'im al-Duri	Former Deputy Head of Department Oil
Dr Mazin Muhammad 'Ali Jum'a	Former Deputy Minister Oil
Nuri al-'Ani	Former DG Oil
Walid Tawfiq al-Dabbas	Former Financial Director Oil