Restructuring and reorganization of the Iraqi oil ministry and state-owned oil companies for maximum economic growth and national development

Abstract

This article summarizes the recommendations for the restructuring and reorganization of the oil industry in Iraq. The focus of the article is to use the restructuring and reorganization experience from national and international oil companies worldwide and to apply them to the Iraqi oil industry. The Iraq Federal Administration should ensure a pragmatic approach to its current policy objectives. The current or future government needs to put into operation new policy instruments to facilitate oil and gas sector institutional restructuring. Iraq should endeavour to produce its recoverable petroleum reserves optimally. The current administration must choose whether to allow the population to use the entire petroleum wealth derived from current petroleum production for their benefit or give future generations a share of the derived wealth from oil and gas development. The main objective of the policies is to make far-reaching changes and ensure the fundamental transformation of Iraqi oil and gas industry in order to optimize the development of the oil and gas industry; this in turn will hopefully maximize economic growth and overall country development. The development of the Iraqi oil and gas policies should be approved by the intended federal executive council under the chairmanship of the "Minister President". The first steps towards restructuring and reorganizing the institutions and the legislation include taking ownership of oil and gas resources, allocating acreages to Kurdistan/Iraq and neighbouring states, government participation, applying fiscal principles, and improving transparency and good governance. It is important to provide the institutional framework that governs the operations of the industry, including the functions, powers, structures and funding of these institutions. The operations in the upstream of the industry include licensing, leases and contracts. Other considerations covered are award processes, right of participation by the government, marginal fields, indigenous companies, termination and revocation of licences and leases, matters on fees, rents and royalties and finally provisions on associated natural gas.