Q: How do you feel things are going so far in the development of Iraq’s oil capabilities? Are you satisfied with progress to date?A: We have signed contracts for three licensing rounds, in addition to a separate contract for al-Ahdab oil field. The progress we have made is very clear, in spite of the tremendous volume of work – in our estimate it is one of the largest projects in the world – and bearing in mind that the quality and type of work is unique and it is being performed for the first time in Iraq, and in spite of the relatively unstable conditions sometimes prevailing in the country. For example, at al-Ahdab oil field, we have completed the first phase of development in two years and three months – instead of the planned three years – at a smaller cost than estimated. With the oil fields of the first licensing round, there has been a production increase of 10% in less than one year, whereas it was estimated to take three years to reach this level. We are working towards reaching the first production stages of the fields of the second licensing round within two years, instead of the proposed three-year time span.In my estimation there has been very good progress and considerable success. Of course, when you start something [of this nature], it is going to be rather difficult. There are some bottleneck problems but I expect that the upcoming work will be much easier and smoother. Now all government and non-government authorities have realised the importance of these contracts, all parties are offering their support to the Ministry of Oil. In the past six months, when I have asked for anything for the ministry from the Council of Ministers, it has been agreed without any discussion or deliberation. This support is an additional incentive to accelerate the development of our production capacities. Those capacities are not only for the government. It is also very important for the people of Iraq [for us] to achieve such production increases.

Q: How much of a problem is the absence of a hydrocarbon law? Is this something that concerns you?A: The draft hydrocarbon law that exists in parliament has become obsolete. The parameters have all changed. The Ministry of Oil, along with the supreme energy committee that comprises 10 members, has submitted a new draft for this law to the Council of Ministers. The draft absorbs all the changes that have happened within the Ministry of Oil. We hope that parliament will understand and recognise this in order to proceed with the approval and certification of this draft. [Editor’s note: The draft was approved following the interview and awaits final passage by parliament.]


Q: How confident are you about the security of refineries and oil supplies, and what is your level of confidence in the security forces and the oil police to safeguard these assets?A: In the past, we have been informed of important information regarding some very realistic threats to the oil sector after terrorists realised that the success of the Ministry of Oil is core to the success of Iraq's development. The Ministry of Oil renders direct services that constitute the main services in Iraq. For example, it supplies about 18 hours of power per day. The Ministry of Electricity currently supplies only about six hours of power per day. In the past, our strategic installations have been exposed to very critical and very dangerous sabotages and attacks.This subject is very important to all the government authorities concerned. Many important meetings have been carried out in the Council of Ministers regarding this matter. In those meetings we have taken very important procedures and decisions to enhance protection and provide all the support necessary and possible to safeguard those installations.The Ministry of Oil has started a pilot plan that uses very modern, highly technological equipment for protection and security. We have started to install surveillance cameras and have provided ad hoc tools and equipment for security, including police dogs. Also, there are some techniques that we have started to study and consider in order to protect the pipeline network system and the remote facilities in the oil sector. We also have an ad hoc police system, the oil patrols police. Its staff consists of more than 30,000 police, whose remit is to safeguard and protect all the strategic establishments of the oil sector.

Q: If you look forward five or 10 years, where do you think Iraq will be as an oil producer? What kind of volumes would you expect and the what kind of clout would you have in the global oil industry?A: Personally, I am very optimistic regarding this outlook. We look forward to Iraq, even in fewer than five years, being a top oil-producing and exporting country. We set a target for the term of the current government. Our target is to export more than 4 million barrels a day at the end of this term. Of course, we are in a position to make a fully integrated plan to absorb all the expected increases and build appropriate infrastructure. At the end of this year we are going to complete the first phase of the development of the Basra oil terminal. This important project will increase the export capacity of Basra terminal to more than 5 million barrels a day. We have other plans to develop our export outlets from Turkey – this would account for more than 1 million barrels a day. We also have a pipeline network system, Trans-Syria, at a capacity of 3 million barrels a day. We are talking seriously about a capacity of more than 10 million barrels a day as a whole.Of course, we are keen to supply the oil markets according to the needs of that market. According to the information available to us, in the coming years Iraq is going to be the only qualified country to increase its production capacity by high levels because it owns a great number of large undeveloped fields. But the reign of big exploration processes is over. Now, [throughout] the world, there are no big exploration discoveries, whereas we are talking about 75 fields. If developed, the figures would be considerable. The explored regions in Iraq are very limited and minor, therefore our plans for the next five years include concentrating on exploration activities. We have set a very specific plan accordingly. A part of this would be going on the fourth licensing round, where 12 exploration blocks would be determined and specified. I would also like to emphasise that in the coming years, Iraq will witness a new industry of gas processing. We look forward to increasing capacity due to the growing need for gas. We also aim to be among the top exporters of gas, especially in the Middle East and Europe. We have planned projects based around this prospect.

Q: Do you feel that the contracts with the international oil companies have been fair and advantageous to Iraq? Recently there has been criticism of BP’s contract in the international media and claims that the contract has been revised in a way that is more favourable to the company than to Iraq. How do you respond to this?A: I would like to point out that all these contracts that have been approved and certified (that we called service contracts) are simple, clear and explicit. All these contracts were carried out with a transparent process and very clearly set. These contracts were done not only by Iraqi national cadres, but we have tried to use the experiences of other international companies regarding this matter. Global authorities appreciate the kind of contracts that make a 'revolution' in the international oil industry – the costs paid to the contractors are very simple. If, for example, we talk about Rumaila field, the contractor deserves a fee of less than $1 for the production of the additional barrel, and these figures are unprecedented. In my own estimations, the contracts were very just and fair and they have really achieved utmost interest for the people of Iraq. No change has ever been made regarding the contract of Rumaila, after getting formal approval from the Council of Ministers, as with other contracts. The signatures of those contracts were distributed among many sites and authorities; we have even announced and published the contracts and the drafts online. But I think it is a campaign to target Iraq’s plans as far as the oil sector is concerned, because it would cause a problem and make people angry. We really expect this campaign, and we expect other campaigns, to be carried out.

Q: What messages are you keen to communicate to companies interested to come and service the oil industry in Iraq, and international oil companies themselves about Iraq? A: In spite of the success and the excellent progress that I have just pointed out, I always reiterate for the international oil companies that [Iraq's future will only get] better and better. Improvements are continuing on all levels – security wise and legislation wise. This will really protect investors, in terms of people’s understanding and co-operation and, most of all, the support rendered by the government and the people. All these are very encouraging factors.Iraq has a wealth of resources, rich history, ancient civilisations, considerable financial revenues and natural wealth. [Hopefully], progress will be swift, not only in the oil sector but in other sectors as well. But for the oil sector, 'the renaissance' is very clear. When we talk about reality, about figures, we currently export 2.2 million barrels a day, compared with last year’s figure of 1.89 million barrels [a day]. We also look forward in the coming year to seeing an increase in exports to 2.5 million barrels a day. Then the oil industry will really appreciate the volume of those figures.