Iraq’s oil sector: the biggest corruption in the country’s history

No doubt the Iraqi oil sector is the spirit of economy  and its artery, and is a main source of budget and accounts for more than 95% of Iraq’s state revenues , However corruption in the Iraqi oil sector record levels reached billions of dollars.

Torrent of corruption in the Iraqi oil sector is inexhaustible, just like the rest of the wealth of Iraq which experienced the worst robberies since 2003, and led to turn Iraq ,. to become today financially unable to face the risk of not being able even to pay salaries to civil  servents.

Estimates suggest that Iraq has the largest oil reserves in the world that it is estimated at about 143 billion barrels and that there are from 50 to 200 billion barrels  have not been discovered yet, what makes Iraq the largest unexplored market in the world.

In our previous articles  we dealt with the licensing rounds in Iraq file, which is one of the largest theft and looting in Iraq’s history, and also is the largest disaster for Iraq and the economy, but the conditions of the chaos that has befallen Iraq, which has sought  by an internal parties to exacerbating it prevented disclosure or highlight them, It was  due to get systematic exclusion of national figures, and flooding the country with economic, political and security crisis to form a cover to  obscure attention from these abuses and thefts in the Iraqi state, estimated at hundreds of billions of dollars.

Reports indicate that the loss of Iraq from the smuggled  and exported  oil illegally abroad since 2003, estimated at $ 120 billion.

Here we mention the  investigative inquiry  conducted by “Fairfax Media” and “Havengtin Post,” which revealed about “thousands of documents” and the loss of more than half a trillion dollars from the Iraqi state funds during the reign of former Prime Minister Nuri al-Maliki  in the form of transactions  of corruption under the oil contracts cover included Iraqi high-ranking officials . The estimated value of these funds are  more than half of oil revenues between 2003 and 2015, estimated at $ 800 billion.

No wonder that the Transparency International organizations put Iraq in the ranks of countries such as Nigeria, which is the most corrupt countries in the field of oil industries.

The Oil Ministry faces criticism about export policy, which sometimes work to stop the liquidation of some units in some refineries in order to increase export volumes at the expense of the  refinery and this is indicated by the varying amounts of production and export rate in some months.

The Iraqi constitution, which was approved in 2005, it was stipulated that the ownership of the oil back to all Iraqis, but did not specify how to divide the wealth .In an attempt to determine how the money is distributed, it has been developed oil and national gas law, which emerged in 2007, however, all the different drafts are still incapable of resolving conflicts between producing oil and non-oil areas, and the law is still pending and waiting approval by the parliament after nine years.

The absence of real legislation for oil and gas to many of the crises between the Baghdad government and the Kurdistan Regional Government of Iraq  which was objected to by the Kurdistan region and calls for the need to enact a law according to the Constitution of 2005 and in accordance with the federal system.

The issue  does not stop with the oil ministry but goes beyond it to include also to one of the main actors in the Iraqi oil industry, which is the Iraqi Oil Marketing Company (SOMO) and observers wonder about the reasons behind this great mystery in SOMO, which is the main artery of the Iraqi economy, it is not  yet known how the purchase process  from the  international companies  was done, and why is not revealed about the company’s business, which operates financial contracts and commercial deals estimated by a hundred billion dollars a year, in the Iraqi parliament despite the claims in this regard by many parliaments,  it did not  host any official of the company before the Iraqi parliament to hold him accountable or even talk to him about the large commercial and financial contracts run by this company.

And  this neglect and lack of control to the oil fields goes beyond it where Iraq produces about 1.86 billion cubic feet per day of gas associated with oil, according to statistics for 2015, but about 1.3 billion cubic feet of them burned every day for lack of processing facilities necessary for the exploitation of gas and its use in many areas such as power generation and as fuel cement plants, fertilizers, petrochemicals, and Iraq is the fourth most state to burn gas in the world, according to 2011 statistics.

A few months ago, the Dutch company “Shell”  opened in Iraq, the first phase of the project of  associated gas  in the southern Majnoon oil field at a cost of up to $ 17 billion to support the country’s energy, but this agreement spin doubts about it because of the proportion of foreign companies (Shell) amounting to 44 % and Mitsubishi 5 percent and South gas 51%, which experts see as a more than worthy of these companies.

The reports revealed that Iraq is losing $ 7 million a day because of what is burned from the southern fields without the benefit of it. And it burned nearly 700 billion standard cubic feet of gas per day in the oil fields.

To talk about the oil sector and it’s damage as a result of corruption, it can not be confined to one article , but needs to  the deep and long writings, even the date of writing these words there are deals and robberies were taking place in the corridors responsible for this huge sector institutions, and the tip of the iceberg !!

Iraq’s oil industry today suffers from the effects of corruption, which snap the all joints of life in Iraq, and now the quota system and the absence of professionalism as a destructive element for any future growth, and now oil is a curse on Iraq and its people, not to mention the collapsed financial situation because of the deficit, which was accompanied by annual budgets, accompanied by the absence of development and exacerbation of crises and migration it over the past years, and to resort to borrowing from international institutions, add to that the lack of security and the confrontation with al Daash, which made Iraq today is on the brink  of economic collapse because of these accumulations, and this corruption  will not stop at this point, especially with the  absence of control and seriousness in the face of corruption and  its owners that operate without supervision or control !!.

Rawabet Research and Strategic Studies Center