State Oil Company to be Reconstituted in Iraq

The US-led Coalition Provisional Authority (CPA) has proposed to have a reconstituted Iraq National Oil Co. (INOC) in place before June 30th, the scheduled date for the handover of administration to the Iraqis, according to outgoing adviser Robert McKee.

He said the plan aims to help depoliticize the oil industry and make it easier for Iraq to attract the long-term investment it desperately needs.

The CPA's vision is for there to be clear separation of powers between a new INOC and the oil ministry. The ministry would act as a government agency and oversee critical matters such as OPEC, but would have little or no say in day-to-day management of the industry. This would be left to INOC, which as McKee sees it, would have an experienced technocrat as director general or president, answerable to a board of directors that is free of political control and made up of industry experts.

A potential model is Saudi Aramco, which has a board chaired by Oil Minister Ali Naimi that comprises heads of each department and also a number of external -- including some American -- advisers. McKee said the Saudi structure has been looked at closely, and that this would enable current CPA advisers to be kept on as board members of INOC.