Thread: Archive News - Iraqi Dinar Think Tank - 22/06/2010 - 04/10/2010

Iraq Signs €42m Agreement with EU

Iraq has signed a cooperation agreement with the European Union worth 42 million euro [65 billion Iraqi dinars] to develop Iraq’s institutions , a government’s official said.

“An agreement has been signed with the European Union to develop the Iraqi institutions and education, health and services ministries, in addition to developing other institutions like the Independent High Electoral Commission (IHEC),” Thamer al-Ghadban told Aswat al-Iraq news agency.

“The agreement includes a donation worth 42 million euro as a technical support in Information Technology,” he added.

http://www.iraq-businessnews.com/?p=6963

Ban Ki-moon Praises Iraqi NDP

The United Nations (UN) Secretary General Ban Ki-moon praised the Iraqi National Development Plan (NDP), encouraging the Iraqi government to work more within different levels.

“I congratulate the Iraqi government for finalizing the 2010-2014 NDP,” Ki-moon said in a report on Wednesday, as reported by Aswat al-Iraq.

He noted that he sees positive initiatives in this regard.

“I thank the Iraqi planning minister, his office, and donors for their continuous support and commitment to the United Nations Assistance Mission for Iraq (UNAMI),” Ki-moon added.

http://www.iraq-businessnews.com/?p=6959

Gulf Keystone Commences Drilling on Sheikh Adi Block

Gulf Keystone has announced the commencement of drilling operations on its Sheikh Adi-1 exploration well effective August 4, 2010. This is the first exploration well to be drilled on the Sheikh Adi Block immediately to the west of the Company’s Shaikan Block, site of last year’s discovery of the giant Shaikan oil field. The Company has an 80 percent working interest in the Block and is carrying the Kurdistan Regional Government’s 20 percent working interest.

The well design for Sheikh Adi-1 has been modified to drill through the geopressured sections of the Triassic. This high pressure interval forced the cessation of drilling on Shaikan-1, at the point when the well experienced the inflow of significant volumes of oil and gas from this section of the Triassic. The Sheikh Adi-1 is designed to drill through the Cretaceous, Jurassic and the Triassic age rocks, to a planned total depth, depending on well results, of 3,850 meters. Drilling is expected to take 6 months. The Company’s estimated oil-in-place resource potential for the Sheikh Adi structure is in excess of one billion barrels.

http://www.iraq-businessnews.com/?p=6949

Independent media struggles to gain a foothold in iraq

It is two years since the newspaper al-Zaman al-Aan was shut down. Muhammad al-Rubaie, its Editor-In-Chief, still rues the day the dream ended. The paper could not attract enough advertising to cover its print costs, let alone make a profit.

"Our aspiration, from the beginning, was to create real independent media. We realised that the quality of material, the courage in news coverage and the artistic way in which you relay your message were all of no relevance,” complains Rubaie. “There are mafias controlling the most important things needed by a newspaper: advertising and distribution."

To attract advertisers, Rubaie says, newspapers have to deal with those working behind the scenes of the newspaper industry. “These people set the rules. The adverts have to be where they want them to be. If the advertiser wants to advertise his car shop at the bottom of the front page, the newspaper has no say.

“Distributors have their own conditions, too,” he continues. “He wants half naked women on the covers or headlines about political scandals. There’s no interest in culture or real politics. Nobody cares any more.”

“Politicians sometimes promise to support newspapers that agree to publish lengthy coverage of their meetings or that promote their parties.

After two years of hard work, Rubaei was obliged to close his newspaper. He reached the conclusion that his newspaper would never attract advertisers if it did not completely change its outlook, style and values.

Faeq al-Rifaei, the owner of the independent al-Manara newspaper, is another publisher who faces similar financial problems. He too is unable to attract advertisers.

“Iraqi independent media is in a financial crisis. We need to find a way out. It’s difficult attracting advertisers and there is a monopoly in the industry held by big Iraqi TV channels and newspapers.”

The Iraqi Media Network (IMN), funded by the parliament, was founded after 2003. It is composed of a number of TV and radio channels and newspapers. The main two parties are the Iraqi Television Channel and Al-Sabah newspaper.

Al-Rifaei stressed the need for an institution capable of attracting advertisers from well established Iraqi and international companies. He thinks an institution that gathers a number of newspapers under its wing and works on their behalf would save newspapers money and make it easier for newspapers to attract advertisers.

Ziad al-Ujaili, President of the Press Freedoms Observatory, is concerned about the Network’s effects on independent media.

"It is the biggest monster swallowing up all others because it dominates private and public advertisements," he says.

Ujaili wants to see laws banning the network from advertising on behalf of the state, more active support for independent media in the country and a higher level of professional standards in the industry.

Newspapers in Iraq have a severely limited supply of private sector and international advertising. The most common adverts relate to government bids and auctions, mobile phone companies US army ads and seasons ads relating to parliament and provincial council candidates. In Kurdistan, real estate companies dominate, followed by malls and city tourism agencies.

Not only are newspapers unable to attract advertisers, they also find difficulty marketing their own newspapers and attracting readers.

“The biggest Iraqi newspaper has a very small readership and readership has also been affected by the internet. Without investment, the market will remain stagnant. We need better independent media capacity,” says Ujaili.

“Mutual blackmail” is the relationship that exists between media outlets and the political parties, according to Irada al-Jibouri, a media professor at Baghdad University.

"There is a very complicated process characterising relations between the different parties. For example, newspapers start to open some corruption files related to some ministries. Before reaching comprehensive conclusions on the different issues raised, the space that should be allocated to results obtained regarding these files is suddenly occupied by commercial ads."

"Adverts are monopolised by party newspapers, especially by the daily ones," says Saman Nouh, Editor-In-Chief of al-Ahali independent newspaper.

"Those that connected to the ruling authority, like al-Sabbah, get the biggest share."

"Nevertheless, advertising covers only around 20-30 percent of printing costs,” Nouh continues, stating that other costs are covered by direct financial allocations.

"Most of the newspapers are published for political rather than commercial reasons," he explained.

Muayyad al-Lami, the head of the Iraqi Journalists Syndicate, expressed regret that the state funds so much advertising and that independent institutions do not have access to that funding.

“independent institutions do not have access to this funding. Independent media does not have the financial means to pay the salaries of their employees and thus are obliged to close."

State institutions, he believes, should be neutral and “distribute ads equally among all newspapers.”

Al-Lami does not believe that a mafia controls the ad market in Iraq.

“The number of newspapers that distribute 20,000 copies or more in Iraq is very limited. Any company or institution wishing to reach people, will naturally resort to the more popular newspapers or TV shows.”

As for procedures to be taken to end this crisis, al-Lami said that a proposal will be submitted to the new Iraqi parliament “to allocate a budget for independent media institutions in Baghdad and the provinces to support them and to monitor closely the conditions in Iraq.

"The idea of forming a committee to take the responsibility of distributing ads among the different media outlets will be discussed. Advertisers will always opt to advertise with bigger media outlets, but the committee will ensure fair distribution among independent outlets," he said.

Abbas al-Yasiri, member of the trustees' board of the Iraqi Media Network, defends his network and rejects rumors that it monopolises the advertising industry.

"According to law, the network should finance itself and the current funding received from the state is temporary. Once the network can stand on its feet, it will cease to receive funding,” he claims.

"Al-Sabah newspaper ranks first among all others given its distribution volume. This is the reason why all advertisers choose it," he said, responding to claims that the newspaper’s politics helped it to receive more advertising revenue.

Yasiri admitted that he believes some TV channels and newspapers attack some political parties in order to get advertising.

This is because of the absence of competition and the absence of agreed upon prices among the different media outlets,” he says.

There are no accurate statistics on the number of media organisations in Iraq. Unofficial figures say that there are over 50 TV channels, and 200 newspapers and magazines. With all of them competing for advertising revenue, it is unsurprising that many fail to obtain the most important source of revenue and go out of business. But the government can still do much more to ensure that the playing field is balanced as much as possible to make a healthy, balanced, independent media flourish in Iraq.

http://www.niqash.org/content.php?co...id=2732&lang=0

Measures to protect banks, retail banking in Iraq

A source at the Iraqi Interior Ministry on Saturday that his ministry has prepared an integrated security plan for the protection of private banks, retail banking.

The source told the News Agency of Kurdistan (Akaniwz) "The interior ministry has prepared an integrated and coordinated plan for the protection of private banks, retail banking in Baghdad, Diyala and Anbar and Mosul after the recent burglary that occurred last Thursday in the New Baghdad area."

He added that "This action comes after the arrival of accurate information that al Qaeda is close outlets financed from abroad and began to rely on funding in particular from inside Iraq and through its operations specifically."

"There is accurate information that al Qaeda intends to carry out a robbery on the banks of civil and shops of banking in the areas of Diyala and Mosul."

The source noted that "preliminary information to the achievement of an incident in the New Baghdad reports that al Qaeda is responsible for them."

He said "The security measures also may expand at the weekend to protect the markets sell gold to close the way for criminal gangs to exploit that."

The three exchangers were killed in an armed robbery in the New Baghdad district, south-east of the capital.

The Interior Ministry had earlier announced that the intelligence information obtained by the security services Aerakipfjr today, stating that al-Qaeda began to rely on internal funding after cutting off external support for it in the recent period.

Al Qaeda in Iraq has lost many of its leaders after the killing of Abu Ayyub al-Qaeda leader in Iraq, Abu Omar al-Baghdadi Qaidtnzim "Islamic State of Iraq" of the base in a raid by Iraqi and U.S. troops on the Thar Thar area.

He said U.S. and Iraqi officials said the attack on the al Qaeda leadership in Iraq coincided with a series of victories on the field impact arrested about 300 suspected al Qaeda operatives.

http://www.aknews.com/ar/aknews/2/171570/

Rebuilding Iraq

Housing tops Baghdad’s growing to-do list, but as work begins on infrastructure ranging from airports to sewage plants, Iraq’s modest contracting capacity is being stretched to its limits, reports Gulf News.

Iraq faces mounting reconstruction needs across its housing and infrastructure sectors, yet the country’s contracting sector is struggling to maintain momentum as increasing numbers of Iraqis clamor for homes.

Large international contractors have their hands full in other parts of the region, and local players are finding it a challenge to procure equipment and materials to commit to project schedules. All this is slowing progress on key projects for which budget has already been made available.

Iraq’s $72 billion budget for 2010 has earmarked 30 per cent of this spend for infrastructure and development projects and Baghdad has not been shy in promising large sums to flesh out its plans over the longer-term. It has, for example, pledged at least $150bn in total to develop infrastructure, agriculture, transport, telecoms, energy, entertainment and housing industries.

However, the failure to form a government five months after inconclusive national elections isn’t helping things; obtaining licenses and approvals is proving a lengthy process in Iraq, as developers frequently complain.

http://www.iraq-businessnews.com/?p=7035

Economic: Iraq lacks a plan to develop industry

The Iraqi academic specialist in the economy, said Sunday that the Iraqi government has failed to develop the industry and reduce the consumption of Iraq's food imports in the past four years.

Abdul Hadi Salman told Kurdistan News (Akaniwz) that "the Iraqi government has failed significantly to save Iraq from being the leading country in the region in terms of food consumption, due to the lack of a plan to promote the reality and satellite in the country."

"The next government has the duty to promote the reality of a major satellite in the country and to save Iraq from the specter of import, which has eroded the country's financial budgets over the past years."

"The fact that the industrial sector solve a large part of the problem of unemployment in Iraq, as it is running the largest number of youth and the unemployed."

Experiencing economic and industrial movement at the present time lethargic because of political differences between the main blocs in the country on the formation of the next government. It has hit the country since the announcement of the Federal Court for ratification of the election results on the first of June last mobility politically, between blocks four winners in the elections (which Iraq, which won 91 seats, the rule of law 89, the National Coalition 70 and the Kurdistan Alliance 43) with a view to Agreement on the formation of the cluster, which will cost the government, but it did not succeed so far.

http://www.aknews.com/ar/aknews/2/171811/

Call for the development of Iraq's financial dealings with the world

Iraqi economic expert called on Saturday, the next Iraqi government to develop techniques in dealing with the financial banking world, particularly in countries that have a role in the reconstruction of the country.

Said Abdul Hussein al-Shami, told the Kurdistan News (Akaniwz) "The Iraqi government will require them to improve their position in financial dealings with the countries of the world through the establishment of significant measures to reform banking transactions between them and the States that Iraq has ties with important economic."

He pointed out that "many factors behind the deterioration of the situation Iraq, a banking routine administrative and transaction non-technical, which cast a shadow on the economic reality in general in the recent period."

He said al-Shami "this matter will be resolved through informed cadres in government and private banks and formal financial institutions in Iraq on the mechanism of banking developed countries."

And that "many countries of the world are beginning to promote outdated banking dealings in order to exploit the time needed to rebuild our country so the main task, which lies on the next Iraqi government is the development of financial transactions in line with the size of the projects in Iraq."

Shami and concluded by saying that "the coming period will be the end of the talks if the government formation stage of an economic mission in the history of the country."

The central bank had earlier announced its intention to conduct a number of changes in the mechanism used to develop its work with the financial world.

http://www.aknews.com/ar/aknews/2/171591/

Legal Challenge to Iraqi Oil Contracts

The Supreme Court of Iraq is currently considering the legality of the Rumaila oilfield contract awarded by the Iraqi Ministry of Oil to BP and China National Oil Petroleum Co (SINOPEC) in the first bidding round for oil and gas field development contracts in 2009.

The lawsuit has been filed by a former Iraqi MP, who argues that the BP contract violates the Iraqi constitution. The outcome of this case is likely to have significant implications concerning the legality of the contracts that were awarded to international oil companies (IOCs) by the Ministry of Oil in 2008-09.

Iraq Oil and Gas Licensing Rounds
The Iraqi government, in an attempt to redevelop its domestic oil and gas industry following years of war and sanctions, opened two licensing rounds in 2008 for the further development of six existing and operational oilfields and two gas fields. The first licensing round was launched in June 2008, with results announced in June 2009. The second licensing round was launched in December 2008, with results announced in December 2009. The Rumaila oilfield, Iraq’s second-largest, was the only deal offered in the June licensing round. Seven oil fields were awarded in the second licensing round.

The contracts awarded in the bidding rounds are 20-year technical service contracts (TSCs), which are based on IOCs accepting a fixed fee per barrel of oil instead of an equity stake. Under a TSC, the IOC becomes a “Contractor” for the relevant Iraqi regional oil company (ROC), such as the South Oil Company or the North Oil Company, for the development of the relevant oil fields.

The Regulatory Framework of Iraq’s Oil and Gas Sector
The Iraqi Constitution of 2005 (the Constitution) contains several provisions that address, often in a fairly vague language, the control and distribution of natural resources. The Constitution states that all oil and gas is owned by “all the people of Iraq in all regions and governorates.” The language, on the face of it, does not admit to the ownership of any particular resource by any particular group or geographical or political region. Notably, the Constitution does not vest oil and gas resources in the “state”, nor does it allocate the resources to particular regions or governorates as defined by the Constitution. It only states that the federal government, with the “producing” governorates and regional governments, shall manage oil and gas “extracted from present fields” subject to a revenue distribution formula, and provides for equitable distribution of revenues in proportion to the population, and that distribution “should be regulated by a law”. However, the term “present fields” has not been defined. Thus, it is not clear if it includes fields that are only currently producing or if it also extends to other fields. It is also unclear whether the currently producing fields include the partially developed fields.

Another point of contention concerns the proper roles and authorities of federal and regional authorities for equitably sharing oil and gas and making strategic decisions on the utilisation and management of resources. This ambiguity has contributed significantly to the deadlock between the Iraqi government and the Kurdistan Regional Governorate (KRG) over the draft of a new legislation on oil and gas. The federal government maintains that the Constitution does not allow the KRG to adopt unilateral and permanent measures over the management of the oilfields and, as such, any contract signed after the draft oil and gas law was agreed in February 2007 is “illegal” until reviewed and approved by the Iraqi Ministry of Oil.

Ironically, the Constitution does not expressly authorise the Ministry of Oil to award contracts to IOCs either. However, the Ministry of Oil maintains the legality of the contracts awarded to the IOCs on the grounds that (1) the constitutional requirement for the approval of the Councils of Representatives only applies to international treaties and agreements between the State of Iraq and other States, and so commercial contracts between an ROC and IOCs do not need such approval; and (2) the TSCs were awarded under the proposed Hydrocarbons Law, although this has not yet been approved by the Council of Representatives.

The Draft Hydrocarbons Law
The draft federal Hydrocarbons Law was agreed, in principle, in February 2007 and received the approval of the Council of Ministers. It was to be submitted to the Council of Representatives for approval. The draft law contains a package of interconnected measures and several other companion laws and legal texts (eg, revenue sharing and taxation) designed to restructure and rehabilitate Iraq’s oil and gas sector.

The draft law calls for a nationalised oil system while also paving the way for privatisation of the Iraqi oil and gas sector. This approach drew immediate criticism from certain commentators and interest groups in Iraq, who said that by contemplating foreign and private-sector participation in exploration and production, the draft did not sufficiently preserve the Iraqi national interest and Iraqi sovereignty over its resources. A revised draft was circulated in April 2007 which still did not include a clear mechanism for revenue sharing between the federal government and regional authorities and contained many provisions deemed unfavourable to Kurdish interests. For these reasons, and as the Kurdish regional government allegedly had not been consulted on the revised draft, discussions concerning finalisation of the law broke down. Consequently, the KRG drafted its own “Kurdistan Region Oil and Gas Law”, approved by the Kurdistan National Assembly on 6 August 2007 and signed by President Barzani on 9 August 2007, along with a model Production-Sharing Contract (PSC). A number of companies subsequently entered into PSCs with the Kurdish authorities regarding blocks in the Kurdish region. The federal authorities in Baghdad have protested against this development on the basis that, inter alia, it is unconstitutional, declaring the PSCs as invalid.

This impasse in negotiations between the KRG and the Iraqi federal government has been a major setback for the draft law that was intended to optimise the Iraqi oil and gas sector through a complete structural reform. One such institutional change (to be introduced by the Hydrocarbons Law) is the creation of the Federal Oil and Gas Council (FOGC) which would be the most powerful body in Iraq’s oil sector with the power to review all contracts and to set the country’s oil and gas policy in collaboration with the Council of the Ministers. The FOGC would be comprised of: the ministers of oil, treasury, planning and cooperative development; the director of the Central Bank; a minister representing each region; a representative from each governorate not belonging to a region; executive managers from related petroleum companies, including the Iraqi National Oil Company and the Oil Marketing Company; and three or fewer experts specialising in petroleum, finance and economics appointed to five-year terms. The creation of the FOGC would introduce further reforms in the Ministry of Oil in terms of its strategic policy and planning functions

Contracts Under the Draft Oil and Gas Law
The draft oil and gas law does not mandate the use of a production-sharing agreement as the sole model of contract and allows for other forms of service contracts (such as typical non-risk-bearing service contracts and risk-bearing buy-back contracts) as well as field development and production contracts or risk exploration contracts.

The draft Hydrocarbons Law states that the holder of an exploration and production contract is given exclusive right to conduct petroleum exploration and production within the contract area. It also sets forth the limits on contract duration, differentiating between the exploration phase and the production phase. The initial exploration term is set at four years, extendable by two additional periods of two years each. A third extension of two years (four years in the case of non-associated natural gas discovery) is possible if the extension is justified by the quality and substance of the work programme. Post-discovery development is set at 20 years, with the possibility of five-year extension on negotiated terms. Thus, contract duration can be up to 35 years. Under the proposed terms, 100 per cent of all profits can be repatriated. The only royalty required under the law is 12.5 per cent of gross production, to be paid to the government by the contract holder.

Only the Ministry of Oil has the power to sign contracts with an IOC. However, the contracts are subject to approval by the Council of Representatives. For this reason, there may be a risk that once the draft law is approved by the Council of Representatives, the TSCs awarded in the licensing rounds would need to be reviewed to ensure their constitutionality

Key Provisions of the Iraqi Model TSC
The Iraqi Model TSC defines petroleum as “all hydrocarbons including liquid and gaseous hydrocarbons produced and saved” from the relevant oilfield. While this definition is generally in line with that found in standard TSCs used in other countries such as Turkmenistan and Namibia, it is broader than the definition contained in the draft oil and gas law, according to whch petroleum includes “all crude oil or natural gas, or other hydrocarbons produced or capable of being produced from crude oil, natural gas, oil rocks or tar sands.”

Furthermore, petroleum operations is defined to include appraisal, development, redevelopment and production operations. Production operations means “operations related to production of petroleum including workovers, stimulations, remediation, restoration, operating, staffing, supervising, repairing, decommissioning and maintaining of wells, plants, equipments, pipelines, tank-farms, terminals and all other installations and facilities.”

Once again, it seems that the definition of petroleum operations under the Iraqi Model PSA is broader than that provided by the draft oil and gas according to which “all or any of the activities related to exploration, development, production, separation and treatment, storage, transportation and sale or delivery of petroleum at the delivery point, export point or to the agreed supply point inside or outside Iraq, and includes natural gas treatment operations and the closure of all concluded activities.” It seems that the draft law would have to be amended to ensure consistency with the definitions under the model PSAs.

The Iraqi Model PSAs provide protection against any “change to the law, or by revocation, modification, or non-renewal of any approvals, consents or exemptions granted to the contractor, in order to maintain the contractor’s financial interests under this contract reasonably unchanged.” This stabilisation or pre-emptive regulatory capture clause effectively allows the IOCs to freeze the terms of the contract so that successive economic and political conditions cannot be used as a way for the state to justify modifying the terms of the contract.

Further, the contracts envisage a rate of interest at LIBOR plus 3 per cent. The remuneration fees will have to cover 35 per cent tax. The model contracts also provide for the payment of administrative overhead charges as defined by the TSC.

Public Sentiment and the Future of the TSCS
While some influential political figures in Iraq have denounced the TSCs as “illegal”, there are indications that the incoming Iraqi cabinet, regardless of its political orientation, will push for ratification (perhaps with some modification) of these contracts. In fact, the Iraqiya party, the winning electoral list in the 2010 election, led by Mr Ayad Allawi, recently warned that any efforts to cancel contracts would severely damage Iraqi credibility with IOCs and have potentially devastating economic consequences. Mr Allawi subsequently stated that he would honour deals signed with IOCs, stressing that the deals might need “some minor adjustments”.

While the argument against the legality of the TSCs does have its virtues, the legality of those contracts can be defended on the basis that they do not infringe on Iraqi sovereignty. In fact, they are consistent with the general policy of the government of Iraq to attract foreign investment in the oil and gas sector. Another argument for maintaining the legality of the TSAs is that there is no legislative prohibition on the signing and execution of those agreements. Logically, in the absence of any explicit prohibition, those agreements may be treated as valid.

The Supreme Court’s decision in the BP case could reduce the cloud of uncertainty surrounding the legal status of the TSCs. However, it seems that, in reality, the legality of those contracts is more dependent on the political situation rather than a purely legal issue.

http://www.iraq-businessnews.com/?p=6973

Iraq Oilfields Challenge – Legal Opinion

By Dr. Sami Shubber, founder of Hamourabi Office in Baghdad, Iraq

1. The Iraqi Ministry of Oil awarded a contract to BP and China National Petroleum Co. (SINOPEC) in 2009 for the development of the Rumaila oilfield. A lawsuit has been filed before the Iraqi Supreme Court by a former Iraq MP alleging that the BP contract violated the Iraqi Constitution of 2005. The legal bases for this allegation are not available to us.

2. The Iraqi Ministry of Oil has replied to the said allegation to the effect that: (1) the constitutional requirement for the approval of the Council of Representatives (the Iraqi Parliament) only applies to international treaties and agreements between the State of Iraq and other States, so commercial contracts between the Regional Oil Company (ROC) and the International Oil Companies (IOCs) do not need such approval; and (2) the Technical Service Contracts (TSC) were awarded under the proposed Hydrocarbons Law, although this has not yet been approved by the Council of Representatives.

3. The arguments of the parties to the case have to be examined against the background of the Iraqi Constitution. The first point to be made is that the Iraqi Constitution provides for the separation of powers of the federal authorities, namely, the executive, legislative and the judicial authorities (Article 47 of the Constitution). Each authority exercises its functions and jurisdiction on the basis of the separation of powers. Accordingly, each one of these authorities is fully entitled to function according to the jurisdiction granted to it by the Constitution, and independently of the other authorities. The second point is that there are certain executive actions which have to be approved by the legislative authority (the Council of Representatives). These actions are enumerated in Article 61 of the Constitution. They include, inter alia, the ratification of treaties, the appointment of senior judges, ambassadors, and senior army officers.

4. The award of the TSC to BP has to be examined against those constitutional provisions. First, it is a measure taken by part of the executive authority, i.e., the Ministry of Oil, in the exercise of its functions. Therefore, there appears to be no illegal exercise of power by the Ministry, hence no violation of the Constitution appears to have been committed. Secondly, the award of the TSC to BP is not one of the actions of the executive that has to be approved by the Council of Representatives. Such actions are expressly enumerated in Article 61 of the Constitution. Therefore, it would seem clear that such contracts need not be approved by the Council of Representatives. It may be observed that to subject such contracts to the approval of the Council of Representatives could cause a great deal of delay in the approval process, which would prevent the beginning of the commercial operation of the oil company concerned. This state of affairs may not be in the public interest.

5. In the light of the foregoing, it seems reasonable to suggest that the award of the TSC to BP is not illegal and does not seem to violate any provisions of the Constitution. However, it does seem odd that the Ministry of Oil has relied on a non-existent law, the proposed Hydrocarbons Law, from a legal point of view, in support of its case. For the proposed Law does not have any legal effect until it is approved by the Council of Representatives and published in the Iraqi Official Gazette, (Articles 61 and 129 of the Constitution).It is submitted with respect that this argument is not sound in law.

6. It would be fair to say the lawsuit under consideration is probably politically motivated. It does not seem to have legal merits and therefore is likely to be rejected by the Iraqi Supreme Court.

Sami Shubber, Lic.en Droit, Baghdad, LL.M.,London, Ph.D. in International Law, Cambridge, Barrister-at-Law (Gray’s Inn) and Member of the Iraqi Bar, is the founder of Hamourabi Office in Baghdad and Geneva, and was formerly Senior Legal Officer for the World Health Organisatio (WHO). He is the author of several books on International Law, and has teaching experience at the University of Baghdad, the University of Cambridge, and the University of Geneva.

His latest book is entitled ‘The Law of Investment in Iraq’.

http://www.iraq-businessnews.com/?p=6982