RE: Iraq gives go-ahead to Kurdish oil contractsDon't hold your breath... I've read other articles which have a view that the incoming minister of oil will only be
reporting to the old minister of oil, who's been bumped to a higher position.
Tuesday, Dec 21, 2010
(Adds Kurds' comments on Luaiby and Shahristani's new posts)
By Hassan Hafidh
Of DOW JONES NEWSWIRES
Iraq's parliament Tuesday approved Abdul Kareem Luaiby, a long-servingengineer in various Iraqi oil installations, to lead the powerful OilMinistry, parliament's speaker Osama al-Nujaifi said.
Luaiby,who served as deputy oil minister for the last two years, replacedHussein Shahristani, a nuclear scientist by training, who Tuesday wasalso approved by lawmakers for a new job, with more power, as deputyprime minister for energy. Shahristani was also approved by lawmakers asacting electricity minister until a new minister is named, the speakersaid.
Shahristani, a Shiite who is backed by Prime MinisterNouri Al Maliki's coalition, and who engineered Iraq's dozens of megadeals with international oil companies, is expected to maintain a stronginfluence on the ministry.
Luaiby, 51, has a bachelor's degreein petroleum engineering from Baghdad University. He was the oilministry's inspector general between 2007 and 2008.
In 2008 he was appointed senior deputy oil minister forextraction. Before he was inspector general, he was the deputydirector-general at the ministry's technical department. He also servedin a number of the ministry's affiliated companies such as the Dourrefinery near the capital Baghdad.
Luaiby maintains goodrelations with international oil companies. He helped outgoing oilminister Shahristani execute about a dozen recent deals withinternational companies aimed at increasing Iraq's oil production fromthe current 2.4 million barrels a day to at least 7 million barrels aday in 2017.
The new oil minister's appointment is seen as asign of continuity for international firms that signed deals to developIraqi oil fields, which are among the world's largest but suffer fromlack of investment, war and sanctions.
"This is a good move, ifthe new minister [Luaiby] is under the supervision of Shahristani,"said Ehsan Ul-Haq, senior energy market consultant at the London-basedKBC Energy Economics. "Shahristani's supervision means that the sameIraqi oil policies would continue."
However, the Kurdistan Regional Government, or KRG, seemsto disagree with the notion to allow the newly appointed deputy primeminister Shahristani to have a strong influence in the federal oilministry. Shahristani and the KRG have been at loggerheads over scoresof deals signed by the KRG with international oil companies. Theoutgoing minister said these contracts are null and void because theyweren't approved by the federal government, while KRG officials arguethat they are in line with the new constitution.
"We have seenmedia speculation and assumptions about the deputy PM [Shahristani]being given a special energy portfolio," said a source within the KRGleadership. "As far as the KRG is concerned, no such portfolio exists,"he told Dow Jones Newswires. "We look forward to working with the newfederal oil minister ... to resolve all outstanding issues."
Inhis cabinet's working program, Maliki also urged parliamentarians toenact the long-awaited hydrocarbon law in order to reassureinternational oil companies that signed huge oil deals with Iraq and arevenue sharing law that would solve most of the pending issues with theKurds.
The oil and gas law was initiated by the outgoing government more than two years ago but it never moved past being debated.
-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831; Hassan.hafidh@dowjones.com