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National oil company Bill may be a reason for the loss of Iraq's wealth for future generations?

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National oil company Bill may be a reason for the loss of Iraq's wealth for future generations?

Tarikh التحریر:: 2016/8/10 16:49 • 253 times his read
[In Baghdad]: Amjad Abbas


[size=18]"Fear of the problems about who decides the ownership of Iraqi oil?" asked former Minister put scary about a leaked draft law Iraqi national oil company to be sent to the State Council.

Where the effects of the Bill that ended the oil Ministry recently wrote and received all Iraq [where] a preliminary version of the Ministry will be revised to State Council during the month of August 2016 and who carried the controversial paragraphs stirred by his dismissive reactions and polls in favour of the reservation, especially regarding being a corporation controlled in the ground and above it in the continental shelf oil and gas installations, which raises fears of a constitutional violation regarding independence and distribution of oil wealth On all Iraqis equally and it is not linked to a particular generation.

Reduction of oil property

Description of the science and technology Minister Raed Fahmi PW project that would arouse problems, including difficulty accepting Kurdistan to be management and export fields by oil companies, in addition to foreign corporations that might oppose working with this company."

He feared reduced Iraqi oil ownership to certain people "for the Administration and control of a company depends on stock, decision making will be when you have contributed more, and thus will have problems about who decides the ownership of oil."

He continued: "perhaps under subcontract there be selling stock through the Agency, this mechanism of Iraqi oil coming out of the Iraqi administration," indicating that "the Bill, formally, respects the Constitution, but fundamentally disagree."

Fahmi stressed the need, "the company's Bill is displayed to public opinion and to be fully familiar with the law, because the stock value of 100 thousand dinars is worth nothing to the value of oil if it is managed properly."

According to the draft law, article [2] of the project remember that established public company called [the Iraqi national oil company] and moral personality, represented by its President or authorized by, the article also identified [3] to be company owned by all Iraqis, article [4] be nominal capital of 10 trillion Iraqi dinar [up to 8.4 billion dollars].

Articles identified [6, 7, 8] from nominal shares law firm b 100 million shares, with a nominal value per share of $100 000 or equivalent, and gives every citizen holds Iraqi citizenship [only one arrow] company.

According to the latest statistics of the Ministry of planning announced on 16 July 2016, the population of Iraq reaches 36 million, meaning that 36 million shares 36% will be given to citizens, leaving 64% 64 million shares for subscription and be sold exclusively to the Iraqis, that are not for sale or inheritance in any way.


Restructuring of the oil sector

So he found former oil Minister Ibrahim Bahr parliamentary Energy Commission member, said the new Bill to the national oil company "a requirement for restructuring oil sector properly and correctly."

He said: "this one demands a long time ago, and today there's no law, but ideas for discussion with members of the oil Ministry presented the legislature and specialists, and those ideas can be discussed later, that by which a Bill takes its final form after approval by the Cabinet and then up to Parliament for his legislation.

He noted that "the thing basically in the Bill, is to be a contribution to the company by the Iraqi people, based on wealth, its owners of their own to the Iraqis, and the State-funded their needs."

Iraq began on the 4th of September 1967 oil company code number [123] who consider corporate funds and State-owned companies from State funds, and select their purpose working inside and outside Iraq in the oil industry in various stages including investigation and drilling for oil and natural hydrocarbons, and filter, store and distribute and manufacture of materials or products or extracts or organs or oil chemicals and related industries and trade of these substances.

Prevent company law of contract to invest any of the areas designated for the company through partnership with foreign companies, but that the Revolution Command Council dissolved and its decision (267) in 1987 abolished founding this company and caused the oil Ministry also cancelled for oil Center and institutions of North-South oil company, founded and developed oil companies North and South.

Final draft

Confirming the existence of this draft that was leaked, said Director General of the legal service in the Ministry of oil, had been preparing the final draft of the Bill that the Iraqi national oil company, the Ministry has made a great effort and many hours of work to prepare the draft.

He added, "this new draft will be sent during the month of August to the Cabinet for approval before him and walk by legislative action and review either from the State Council or the House of representatives for approval.

"The draft law specified that the company contribution and the recent decision of the Council of Ministers and MPs and others to pronounce, the company would be owned by the Iraqi people and every citizen only one arrow," pointing out that "the idea of giving one share for every citizen is a Ministry based on article 111 of the Constitution."

Shaher said: "the Government is going to pay the amount of the stock price is not determined until now, according to the company's capital would need approval by the Ministry of finance, and we cannot now".

Denied having subscription for shares of the company, saying: "there is no subscription is strictly controlled by venture capitalists on the company, the shares are not sold and not buy and governed by human existence when born, owns a share and was not entitled to sell or dispose of his property and ends with his death.

On the question about the mechanism for granting the remainder of shares other than shares of citizens, Shaher replied: "oil and gas by the Constitution belongs to the Iraqi people and the company it represents, it manages oil on his behalf, you apply the Constitution, considering that every citizen should not act.

He continued: "the company is vested in Bada people ownership of oil and gas, and it is the people who owns it, not State Government, this would not violate the Constitution, without revealing the mechanism which will sell the remaining stocks of up to 64% of the shares.

And on foreign companies working in Iraq after the founding of the national oil company, said: "we are all connected to the dogmatic relationship with these companies and contractual relationship is the law of contractors and Iraq respects her and tries to develop and expand cooperation with these companies contracted and non-contracted".

He added: "we call for the development of the oil industry by introducing foreign companies and continuously for the benefit of their expertise, technologies and good management of the oil industry without loss of national control over the oil industry in particular extractive.

The oil Ministry has 18 companies, according to the draft law of the national oil company, to join all these companies, and companies [Southern oil Center, refineries, distribution of oil products, oil, oil, oil pipelines, oil tankers, heavy engineering equipment, General oil marketing [Sumo], North, North gas refineries, oil exploration, oil projects, Missan, Iraq drilling, gas South, South refineries, gas].

Bill

Article [9] of the Bill that "the Federal Government is paid the nominal value of the shares of the company stock is citizens paid subscriber, while unpaid non-equity underwriter.

Show articles [10, 11, and 48] of the proposed Bill, the company "owns all natural sources of oil and gas in all territories and provinces, and operate on oil and gas production in all Iraqi territories including submerged land, territorial waters and beneath it all over Iraq, and on the continental shelf in any part subject to Iraqi law under an international agreement or international norms."

According to those articles to unlink oil companies North and South and Maysan, the Iraqi oil tankers and exploration companies and ports of the oil Ministry and the Iraqi national oil company owns without allowance and recorded book value, and moves to the company the rights, obligations, assets and employees of these companies.

Differing legal opinions

Constitutional law professor, stressed the role the former member of the parliamentary legal Committee Latif Mustapha economic philosophy of article 111 of the Constitution indicate that no oil and gas monopoly by people and their majority in the national oil company, so if we don't address the issue of monopoly in law, the Federal Court of appeal as being contrary to the philosophy of oil.

Quasi law attempt to "circumvent the Iraqi people through giving him only one arrow from his ownership in oil, while the majority of people go into that oil to the machine but the judges use it anytime they please and they buy the accounts receivable people and then tax them."

However, legal expert Tariq Harb had a different view about the Bill, "the establishment of the company and make a contribution no constitutional violation, where any Iraqi citizen access to these shares, indicating that this Bill can be issued by a special law regulating the underwriting and incorporation and the profits and losses and that depends on the State Corporations Act No 22 of 1997 that organizes all tightly.

"The law is not in contradiction with the provisions of the oil and gas law established by the Constitution, article 111, this law can abolish company or to keep it, because if passed law empowered to cancel any entity from oil companies."

And he found it "very hard to agree with Kurdistan because there are problems about oil and management principles for how to drill, transport and export, this is a complex issue because the region wants to have his oil, and even the Federal Government doesn't know the quantities of oil produced and the income from exports and even from being sold.

And select Bill "company objectives in article [16]

first: to be actual ownership of all natural resources of gas and is breaking all the Iraqi people in all regions and provinces according to the Constitution, and

secondly: strengthening the unity of Iraq through direct ownership of Iraqi citizens for natural sources of oil and gas,

vi: consolidating and strengthening the democratic system in Iraq by transferring ownership of oil and gas riches of [the Government back to the people], and provincial and territorial governments involved

VII non-performing region in the management and direction of oil and gas production operations within its borders And

11: high rates of annual increase in the volume of oil and gas production to maximize and sustain productive goal over the long term."

A constitutional violation

In return, the Institute's experts described Iraqi President Zouhair Al Hassani for economic reform, the national oil company Bill as contrary to the Constitution, for being incompatible with the sovereignty under article 111 of the Constitution.

"The draft law, is trying to control the oil resources and national wealth by the private sector."

"The Bill even proceeded to the House of representatives, will be undone by the Federal Court, considering he's skirting the State sovereignty of national wealth which belongs to the people."

"To try for the private sector and privatizing the oil sector means wealthy or, no privatization of this sector in any State at which oil wealth except the United States."

Hasani expressed his belief that "it is better to restore the Iraqi national oil company code number 123 of 1967 and the repeal of Revolutionary Command Council Decree [dissolved] number 267 of 1987 merged with the Ministry of oil."

He explained: "we don't need a new law, better to restore the old law, since the Bill in question did not provide for manufacturing, while the first law prescribed by, and now we are manufacturing more than ever to find resources other than oil revenues from crude export.

Economist said the pretty name Antoine, that "article 111 of the Constitution affirms that the oil belongs to the people of Iraq all without exception, and yet oil and gas law has not recognized under the Constitution which confirms this law legislation, and if the enactment of the national oil company before oil and gas law, is a constitutional violation would require amending the Constitution."

"You must specify a 20 million IPO shares, in order that they do not have large capital owners and there is a quota for the middle classes, staff and others from this company.


The oil Division of labour

Oil marketing company Manager [Sumo] Fallah Jassim Al-Ameri, saying that "the Iraqi oil company law divides the work in oil wealth, and that extractive company will have the most issues, while the Ministry's function will build strategies and company control interface for Iraq in the oil sector."

He added that the company would have an independent budget from oil, if oil was $50 it should determine from 10 to 15 dollars for the company and the rest goes to the State, so that they are balanced with the ranks of the State budget."

On foreign oil companies working in the oil fields, "said these companies will link national oil company and there is no problem and no objections by these companies to establish an Iraqi national oil company.

Article [18] of the Act, the powers of the company, including a review of service contracts signed between the Ministry of oil and non-Iraqi companies and enter into new negotiations with a view to amending or replacing these conventions, and give it the right to establish fully owned companies conducting operational processes in the regions and provinces, as well as establish an Iraqi oil service companies for private sector participation, ownership and possession of all movable and immovable property of land and real estate and buildings, equipment and any other assets required for the execution of its tasks, and grants and aid Iraqi and other actors.

According to the Organization of petroleum exporting countries [OPEC] that declared last year 2015 oil reserve rates in oil-exporting countries, Iraq's oil reserves total 143 billion and 400 million barrels of oil, is the fourth highest oil reserves after Saudi Arabia, Venezuela and Iran, Iraq's oil experts consider that the expected number of doubles the size of the reserve.

The project contributed

Member of the Parliamentary Committee on energy oil Kaveh's Mohamed, said that "the law is an important and sensitive national oil company and the Commission, initially, with legislation, but we have to be very careful to be oil and gas, but the Iraqi people, and there is no monopoly by certain persons or companies affects the citizen."

He rejected the percentage of stocks in the Bill for IPO, citing his refusal to "Beware of oil and gas monopoly by people and focus on import to come for the benefit of the Iraqi people."

He stressed the need to "be synchronized between the oil and gas Act legislation with the legislation of the national oil company, because there are articles on the relationship between the Centre and the provinces and territories in managing the throat.

Previous laws did not materialize

And confirms the former member of the Parliamentary Committee on oil and energy Bayezid Hassan, "the main points of contention on the Iraqi oil company, is that Kurdistan wants to be him [Kurdistan's oil company], this company for the territory located in the draft oil law raised territory."

He said that "the region object to this company to be a branch of the Iraqi oil company, and that's OK for the Iraqi Constitution as a federal Iraq system and prevents the concentration of all authorities, whether legislative, Executive or oil, and must be distributed to the provinces and territories.

He pointed out that "there are 3 drafts of oil and gas law, read in Parliament, first in 2007 and the second and third time in 2012, and all drafts contain a substance forming the national oil company because this company had existed previously, but to be a public company for the Government and linked to the Ministry of oil, stock company".

Company capital

Benign indicates Kumar, President of the International Union of businessmen in Iraq, to "put in the Bill about nscsa 10 trillion dinars, equal to the amount of one oil development, and this is contrary to the fact, that the company's capital should be equal to what the company owned by companies and land and machinery and Associates, in addition to estimates of crude oil in the country and that can be extracted at both near and far."

Iraq contains-according to geological studies – about 530 geologically complex give strong indications that the existence of a massive oil kilometers.

No digging these compositions only 115 from 71 proved to contain massive oil reserves that span many fields.

And inform the Iraqi fields detected 71 minefields and never exploits them only 27 a field including ten giant.

Concentrated currently producing oil and gas fields in the provinces of Basra and Kirkuk, followed in importance and Baghdad governorates of Missan fields and Salahuddin, Diyala and Nineveh.

Undiscovered fields and undeveloped in most provinces of Iraq except four are Qadisiyah and Babil, Anbar, Dohuk.

Punitive and that "very little equity value for the country's economic situation and the inflation in the market, adding that our dependence on oil in State revenues and still a 67% of GDP and 92% of fiscal revenues amounting to State through oil and 95% of foreign currency".

"Give up to 40% of the company's annual net income from oil and gas exports, the federal budget is not sufficient for the adoption of the current budget and previous years on oil exports more than 90%, and that's what threatens to impose new taxes on citizens' budget deficit."

And select articles law [40, 41] "annual net income distribution ratios,

first [5%] to capital reserve allocated for investment in development projects and increase oil and gas production, and

II [40%] of the Federal Government's operating budget,

III [5%] distributed to the regions and provinces produced by proportions of contribution to the total annual production of oil and gas, and

IV [40%] to Iraqi reconstruction and Development Fund to invest in Iraqi oil revenues for economic development and reconstruction of Iraq which establishes special act like this law,

VA [ 10%] paid cash to shareholders and evenly, with the mentioned percentages may be changed with the approval of the House."

He saw "a punitive Bill serves a particular category and does not serve the people," the fear of the people, without being designated by "trying their hands to stretch for the remainder of this vital sector, the only one in the country."

Pending the submission of the law to the State Council and passed to the House of representatives to pass the other voices may show other defects characterizes the draft in the light of these objections may be subject to adjustment more than once or returned as professionals opinion.

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