BAGHDAD - In office for nearly two years, Oil Minister Ihsan Ismaael has guided the ministry responsible for generating more than 90 percent of Iraq’s state revenues through periods of wildly fluctuating global oil prices.
He has also overseen several major contracts for field development, including a mega-deal with TotalEnergies for three projects in Basra, as well as finalizing contract terms with China’s Sinopec for the development of Mansuriya gas field in Diyala province.
He insists that the current leadership vacuum in Iraq – a new Cabinet has yet to be appointed nearly six months after parliamentary elections last October – is not putting the brakes on technical work with TotalEnergies over the $27 billion Gas Growth Integrated Project (GGIP). The work incorporates upstream development of Ratawi oil field, a seawater injection project, and a hub for processing associated gas produced at southern oil fields.
TotalEnergies has some “observations” over Iraq’s demand that its newly reconstituted Iraqi National Oil Company (INOC) takes a 40 percent share in the GGIP, he acknowledged. But an agreement will be reached with the French firm, he said, during an hour-long interview with Iraq Oil Report in his office at the Oil Ministry in Baghdad last week.
“There is no opposition to the principle of the partnership, but there are some observations on the share percentage as it is,” Ismaael said. “But we hope that eventually the percentage will remain 40 percent.”
Ismaael, who is currently both Oil Minister and INOC president, also expanded on the ministry’s plans to buy ExxonMobil’s share in West Qurna 1 oil field. The Iraqi Cabinet has approved a sum of over $300 million for purchasing the U.S. firm’s stake, and the allocation has been included in the yet-to-be-passed 2022 budget law.
“We are evidently moving in the direction of purchasing ExxonMobil’s stake,” Ismaael said.
During the 2020 global oil price crash, Iraq was forced to curb crude production under an OPEC-plus agreement that helped propel oil prices up to their current levels of over $100 per barrel. Iraq is now earning more than $8 billion per month, which has bolstered government support for the Oil Ministry’s plans to upgrade export infrastructure and increase production, Ismaael said.
“Really, there is continuous support from the current government, after covid-19 – within the last six months – to support INOC to be a real upstream firm,” he said.
High global oil prices have also had a less positive impact on fuel dynamics in Iraq, with nefarious individuals smuggling fuel subsidised by the federal government into the Kurdistan region to sell at market prices. Ismaael said that the Oil Ministry is planning to send an as-yet-undetermined amount of gasoline to the Kurdistan region, in an attempt to curb smuggling and address supply shortages.
The full transcript of the interview is available for Iraq Oil Report subscribers below.