16 July 2008
The Iraqi government will soon submit a draft law to the legislative council on setting up a National Council for Reconstruction and Development tasked with speeding up contract awards for strategic projects, including oil field development contracts, a senior Iraqi official said Tuesday.
Iraqi Prime Minister Nouri al-Maliki said Monday that the cabinet had endorsed the new body on Jul. 13. He will preside over the council, and it will include several ministers and experts.
“The draft law for the establishment of the new council is currently being finalized and should be submitted to the legislative council within days,” former Oil Minister and energy advisor to the premier Thamir al-Ghadban told International Oil Daily in Baghdad on Tuesday.
“Once it’s discussed by the relevant legislative committees, it will be submitted to a vote. I don’t expect it to take long because the council of ministers is keen on it due to the urgent need for reconstruction projects, whether in the power, housing, health and school sectors, or in the oil and gas sector,” he said.
Officials say ministries have become bogged down by the bureaucracy inherited from the prewar Saddam Hussein regime and have been very slow to push forward projects vital to improve Iraqis’ daily lives, even though money is available for such schemes.
The al-Maliki government is upbeat about being able to drive ahead with reconstruction amid improvements in security in Baghdad and other areas in recent months. It is also eyeing the next legislative elections, expected in early 2010.
The Oil Ministry has yet to award its first contracts to develop Iraqi oil fields. It was expected to ink short-term technical support contracts with several majors at the end of last month, but the signing was shelved at the last minute. Instead, firms were asked to resubmit new proposals for one-year contracts instead of the agreed two.
“The council will be allocated a federal budget in addition to a contingency budget to spend on selective projects that will be deemed vital and strategic by the council of ministers,” al-Ghadban said.
Al-Maliki said companies will be invited to negotiate directly with the new council based on specific contracts, which have still to be determined. In addition to the premier and one of his deputies, the 10-person body will include the ministers of housing and reconstruction, finance and planning, and five experts.
“It is possible that if the council decides that it urgently needs to develop an oil field, it will solicit interest from several companies and invite them to make offers. These offers would then be negotiated directly and awarded by the council itself, if it can justify the urgent need for the award of such contracts,” al-Ghadban said.
Al-Ghadban, who also chairs the prime minister’s advisory commission, said the council will act as an inner cabinet but will seek approval from the council of ministers for its annual plans and budgets. The way in which negotiations are conducted and the criteria for contract awards will be determined by the regulations governing the new body’s work, which are to be issued later.
“It’s too early to detail the role of the oil ministry but it will definitely be involved in the oil sector projects because it’s responsible for the oil sector and it has the expertise,” he said.
Oil Minister Hussein al-Shahristani launched a bid round two weeks ago — Iraq’s first since the US-led invasion of 2003 — for eight oil and gas fields and said long-term service contracts would be awarded by June 2009. However, bidding criteria and terms of awards have yet to be issued, and data rooms have yet to be set up.
By Ruba Husari, Baghdad
(Published in International Oil Daily July 16, 2008)