AMMAN, Aug 10, 2005 (Dow Jones Commodities News via Comtex)
Iraqi oil experts Tuesday called for a "national oil policy" and began outlining possible perimeters to a modern system for Iraq's oil and gas industry during a seminar sponsored by a center headed by former Iraqi Planning Minister Mehdi Hafedh.
"We feel that the problems of Iraq are connected with the future of the oil industry and we have to think about some sort of strategy to manage this wealth," Hafedh told The Associated Press. He currently chairs the Center for Development and International Dialogue, a Baghdad-based thinktank.
Seminar participants discussed a draft working plan aimed at restructuring Iraq's oil policy by rehabilitating oil fields and facilities, developing new fields and completing oil exploration programs. The plan, to serve as a guideline to the Iraqi government, urged greater participation by Iraq's private sector in developing the country's oil wealth.
It also called for a "comprehensive oil law" to be drafted by next year to control the industry. Participants acknowledged that having a "successful oil policy" necessitated political stability in the country and that serious efforts must be exerted to end "widespread corruption," according to the working plan. Without these, "it would be difficult, or impossible, to implement an integrated oil restructuring program."
Although Iraq has the second-largest proven reserves of light crude in the world, sabotage, mismanagement and a decrepit infrastructure have curbed production and kept major oil companies away.
"There are a lot of problems involved, especially concerning the establishment of a special national company and also how to deal with foreign companies because investment in the oil sector is important for Iraq," Hafedh said. "Current production is not at the level needed by the country. There should be a lot of foreign investment to expand production to increase Iraq's revenues."
July saw the highest recorded increase in Iraq's oil exports so far this year, with an average of 1.6 million barrels a day being pumped, but production still falls far short of the 2.6 million b/d pumped prior to the U.S.-led military invasion in March 2003 that led to Saddam Hussein's ouster.
"We are aiming at about three million barrels a day. Unfortunately, we are still at around two million barrels a day and we have to do more to get production up," Hafedh said.
Iraqi Oil Minister Ibrahim Bahr al-Uloum said earlier this month that Iraq lacked refineries and is spending $300 million to import refined oil products to face fuel shortages.
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