After initially announcing three weeks ago that he was setting up Thi Qar Oil Co. in the Nassiriya province, Iraqi Oil Minister Hussein al-Shahristani seems to have got better advice since, and is now set on creating the Midland Oil Co. to be in charge of the central oil and gas fields. Thi Qar division within SOC will remain in charge of the fields in the province, mainly Nassiriya and Garraf. The new decision makes more sense than the previous one especially as North Oil Co. (NOC) and South Oil Co. (SOC) are now overburdened with extensive responsibilities with the 10 contracts awarded to international oil companies in last year’s two bid rounds.
The new company would mirror the old Midland Oil Enterprise, which was created as an independent commercial entity under the umbrella of Iraq National Oil Co. (INOC) by decision of the Revolutionary Command Council in 1980. It was later dissolved by the same order of the RCC that dismantled INOC in 1987 and created NOC and SOC to replace the North Oil Enterprise and South Oil Enterprise. The same order transferred the management of the oil and gas fields of the dissolved Midland oil Enterprise to NOC. Since then, only Missan Oil Co. (MOC) was created as a new entity in 2008.
Midland Oil Co.’s geographic area is expected to be the same as its predecessor’s, defined in the 1980 decision as between latitude lines 32.5º and 34º. These lines cover the provinces of Diyala, Baghdad, Anbar, Wassit, Babel (Hilla), Karbala, Najaf and Qadisiya (Diwaniya). Those provinces are home to the oil and gas fields of Ahdab, currently being developed by China’s CNPC; Badra, awarded in the second bid round to a consortium led by Gazprom in partnership with TPAO, Kogas and Petronas; East Baghdad; Dhafria; Mansouriah; Akkas; Napht Khana; Khashm al-Ahmar; Injana; Naudoman; Gallabat; Chiasurkh; Qamar; Jeria Pika; Kifl; West Kifl; Butma and Marjan.
What Iraq’s oil sector needs next is for INOC to be created and offer the anchor role badly needed by all four regional companies. Once that’s done, the oil ministry would focus on what oil ministries should do: define policy and prepare strategy.