Ten deals makes a happy minister

by Ben Lando and Hussain al-Shahristani, Iraq Oil Minister

Published February 4, 2010

BAGHDAD - Even in the cut-throat world of modern Iraqi politics, there may be no one who has persevered like Iraq's Oil Minister, Hussain al-Shahristani.

He holds a highly politicized job as Iraq decides how decentralized and denationalized its oil sector will be. He's being urged to act fast, since Iraqi oil sales are nearly the sole source of revenue for the country, which needs to fund expensive reconstruction efforts.

Iraq has massive reserves – the world's third largest discovered and plenty more to find – but wars, sanctions and dictatorship have left Iraq under-producing and its oil infrastructure in a dire state. Efforts to streamline an overloaded system have been caught up in political battles, including multiple pieces of legislation to set ground rules for governance and investment.

Iraqi Oil Minister Hussain al-Shahristani (center) with officials from the ministry and Exxon Mobil after the signing of the West Qurna Phase 1 contract Jan. 25 (BEN LANDO/Iraq Oil Report)

Thus, while Shahristani was condemning the oil deals signed by Iraq's Kurdish region, he was criticized for simultaneiously being too stern and too generous to foreign oil companies in a one and a half year process that culminated with two auctions last year and 10 oil contracts awarded to some of the world's biggest oil companies.

Iraq Oil Report Bureau Chief Ben Lando caught up with Shahristani after a recent deal signing ceremony.

Ben Lando: You seem to have a smile on your face everywhere I see you nowadays.

Hussain al-Shahristani: It is a big accomplishment for a country that has been deprived of its oil resources for decades and where revenues have been used to wage wars and to destroy Iraq and the neighboring countries. For the first time the people of Iraq feel they are going to have a significant production of oil, based on contracts that preserve for Iraq its control over its oil and the type of the contract, being a service contract, has been very welcomed by the Iraqi people. The level of production that will be achieved is very significant.

Balance of Article . . . .