North Gas responds to concerns over Iraq oil reforms

Shafaq News- Kirkuk

Measures affecting Iraq’s oil sector should take into account operational requirements and their impact on production, and they are part of a time-limited trial that will be evaluated once it ends, North Gas Company said on Monday.

The company said the Oil Ministry had assured that workers’ rights and entitlements, as well as funding for maintenance and production, would not be affected. “The ministry considers these needs a priority for maintaining the efficiency of facilities and keeping production running.”

The statement followed reports of government plans to introduce reforms in the oil sector, including changes to some administrative and financial arrangements.

Earlier today, Iraqi oil workers protested in Baghdad and several provinces against new crude pricing rules requiring refineries to buy oil at the lower of the SOMO price or the state budget price, after a 30% annual deduction. Protest representative Imad al-Qatrani told Shafaq News that the mechanism could undermine refinery companies, domestic refining capacity and workers’ rights by reducing revenues used to fund operations, facility development and employee payments.

Prime Minister Ali Al-Zaidi said at the eighth Baghdad Dialogue conference on August 21 that the Oil Ministry had been buying one million barrels of oil per day from the Finance Ministry for 5,000 dinars per barrel, with proceeds used for maintenance and employee incentives, a practice he described as waste and corruption.

Al-Zaidi said the government and the ministry later agreed to supply oil at a 30% discount while maintaining subsidized prices for oil, gas oil and gasoline for consumers, a measure expected to generate an additional 17.8 trillion dinars in annual government revenue.

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