Iraqi Oil Veteran to Oversee South

10 September 2008

Iraqi Oil Minister Hussein al-Shahristani has confirmed the former director-general of South Oil Co. (SOC), Jabbar al-Luaibi, as an advisor with the authority to oversee oil projects in southern Iraq, according to a ministerial order issued last week, a copy of which was obtained by International Oil Daily.

Al-Luaibi was removed from his post in May and appointed special adviser in what analysts suspected was a power struggle within the oil ministry in Baghdad. The move provoked controversy, with the southern oil veteran refraining from taking up his new job until his responsibilities were clearly defined in writing. The May 15 directive was supposed to enter into force on Jun. 1.

In a new directive dated Sep. 3, al-Shahristani gave al-Luaibi the authority to “oversee operations and projects to sustain and increase oil and gas production and exports carried out by all operating companies in the southern region, [which include] SOC, Missan Oil Co. and South Gas Co. (SGC), as well as any new companies to be created in the future,” the ministerial order said.

Al-Luaibi’s new role will also include “participation in drawing up and approving plans to develop currently producing fields or fields that are required to be developed in the future to increase production.” The directive also gives him administrative and financial authority over these operations. The position is a new one at SOC and will be based at company headquarters in Basrah.

Al-Luaibi, now on a business assignment for SOC, confirmed to International Oil Daily by telephone this week that he is ready to take up the job as soon as he returns to Basrah next week. “I will start working right away on the short-term and long-term plans for the fields,” he said.

In his new capacity, al-Luaibi is expected to continue to play a major role negotiating contracts with international oil companies to develop producing fields and any undeveloped fields tendered in future. Four southern oil fields — Rumaila, Zubair, West Qurna and Missan — are now on offer in Iraq’s first licensing round. The ministry aims to award long-term service contracts for those fields in June 2009.

With overall authority over firms based in the south, including the newly created Missan Oil and SGC, al-Luaibi will also be a vital part of negotiations to convert the preliminary deal Royal Dutch Shell is expected to ink shortly to gather and process associated gas in the south into a final deal, expected in a year.

Al-Luaibi, 62, is widely recognized for his role in speedily restoring output from southern oil fields after the fall of the previous regime in April 2003. He has been credited with managing to maintain output — and even increase it in some fields — despite dilapidated infrastructure and lack of equipment and materials.

Iraqi oil sources say al-Luaibi, a Basrah native who comes from a well-known southern family, has effectively shielded the southern oil industry against political upheaval by deftly maneuvering around the political parties and militias that have been fighting for control in the area. He used the influence his family and tribe wields in the south to help protect oil infrastructure and ensure oil exports continued uninterrupted.

In his new role, al-Luaibi will not be running day-to-day operations in the southern oil fields. Responsibility for protecting infrastructure and production operations from threats, including the smugglers who have plagued southern Iraq, will now fall on new Director-General Kifah Numan, until now al-Luaibi’s deputy at SOC.

By Ruba Husari, Dubai

(Published in International Oil Daily Sept. 10, 2008)

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