Iraqi Officials Replaced In Political Move

1 July 2005

Two of Iraq’s top oil officials have been replaced by the country’s new oil minister, in a move widely regarded as politically motivated.

The changes represent the second major shake up of the oil ministry since Ibrahim Bahr al-Uloum was appointed as minister in May, Baghdad sources told International Oil Daily Thursday.

Nabil Lamuza, director general of planning and studies, was replaced by an outsider, Fayad Hassan Nemeh. Nemeh, who worked for the last 15 years in an engineering company manufacturing gas cylinders, was appointed earlier this week as director general in the minister’s office, before being named as head of planning.

Another ministry veteran, Hazem Sultan, who headed the reservoirs and field development directorate, was replaced by Nateq al-Bayati, previously director general of the Oil Exploration Co (OEC), one of 15 companies under the umbrella of the oil ministry.

Both Lamuza and Sultan were well known to foreign oil companies. The two had led negotiations with companies over the past year on future possible involvement in developing Iraq’s oil fields. They were also in charge of overseeing agreements signed with 32 international companies covering free technical studies for the ministry and the training of Iraqi engineers and other staff abroad.

One oil ministry insider told International Oil Daily that Nemeh’s appointment was “part of the political horse-trading that brought Bahr al-Uloum to the oil ministry.”

“Nemeh belongs to the Fadilah Party which failed to get its candidate appointed as oil minister, so now it is payback time,” the source added.

During the three months of negotiations on forming an Iraqi government following the Jan. 30 parliamentary elections, the Fadilah Party, which is considered close to firebrand cleric Moqtada al-Sadr, had lobbied for its candidate, the director of the Missan oil fields department in southeastern Iraq Karim Hattab, to be named oil minister. Hattab was rejected on the grounds that he lacked sufficient credentials for the job. He was eventually appointed as adviser in the oil minister’s office, in charge of upstream contacts with production subsidiaries North Oil Co. (NOC) and South Oil Co. (SOC).

Among the outgoing officials, Lamuza had replaced former Oil Minister Thamer al-Ghadban as head of planning when the latter became chief executive of the oil ministry in May 2003, immediately after the collapse of the Baath regime. Sultan was appointed head of the reservoirs department during Bahr al-Uloum’s first stint as oil minister in 2003. Lamuza and Sultan have both retired.

At OEC, al-Bayati’s job was handed to the director general of the Iraq Drilling Co. (IDC), Hunar Nazhat. Ahmad al-Sidiqi, a director in the ministry’s economic and finance department, was appointed deputy director general of OEC. Al-Sidiqi worked for several years in Abu Dhabi, before returning to the Iraqi oil ministry last year.
Fawzi Wardi, a mechanical engineer at IDC, becomes the company’s new director general.

Commenting on the departure of Lamuza and Sultan, one international oil company source said: “The changes are going to create a mess. Follow-up is going to be difficult.”

Still, some industry sources expressed relief at the appointment of al-Bayati as head of planning, rather than an outsider.

“We have been in touch with him while he headed OEC on exploration issues,” said a source with another major oil company.

A separate ministerial order this week named ministry adviser Abdul Sahib Qutob as head of all ministry directorates, except for economic and finance. These include planning, reservoirs and field development, administration, and national industrialization.

Qutob was appointed last month as head of the ministry’s marketing committee, one of three such groups created by Bahr al-Uloum last month in an apparent bid to fight corruption. The other committees oversee contracts and the downstream.

After his return to the ministry, Bahr al-Uloum brought the former head of marketing arm Somo, Shamkhi Faraj, to the ministry as director general for economic and marketing affairs.

Oil ministry insiders said Qutob has become the ministry’s strongman, supervising all vital activities and sidelining deputy ministers. Furthermore, the committees have taken over the responsibilities of different ministry directorates, leaving the latter obsolete, they added.

Some believe that the three deputy ministers will be next to be reshuffled, along with the heads of other ministry companies, such as NOC and the State Co. for Oil Projects (Scop).

Iraqi analysts associated the ministry changes with the return to influence of Ahmad Chalabi, a controversial figure in Iraq and abroad, who was appointed deputy prime minister after January’s elections. Chalabi was later named head of the newly created Energy Council, which replaced the former Supreme Council for Oil Policy and oversees the ministry.

More recently, Chalabi was also named head of a higher committee for contracts, which was established by a Cabinet order issued by Iraqi Prime Minister Iyad Allawi but instigated by Chalabi himself.

Chalabi has said the committee will be in charge of approving all deals for services and contracts that exceed $3 million, with all ministries and government agencies required to obtain such approval before entering into contractual obligations. Chalabi said the new body would help wipe out corruption.

By Ruba Husari, London

(Published in International Oil Daily Jul.1, 2005)

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