Dr . Sabah Al Saadi
Advisor to the Ministry of Oil for Legal Affairs
12/8/2018
Hello ...
I missed watching the episode of the resolution program for you on the channel of the Tigris, which included the meeting with Dr. Haytham Al-Jubouri and Hamzeh Al-Jawahiri and Ali Jbeir on the evening of 6/8/2018. I saw it on YouTube, but I followed the other meeting with Dr. Haytham Jubouri on the second day 7/8/2018 on the channel itself, and we regret the occurrence of an altercation between Mr. Haitham Jubouri and Hamza Jeweler and we wish that the dialogue will continue between them objectively and professionally. I am not a spokesman for the Ministry of Oil and I am not charged with defending them. There are specialized bodies in these fields. I have to defend the truth that is intended to be covered or not to appear, so I think it is my duty to make some observations in my personal view of what presented by d. Haitham al-Jubouri in terms of contracts licensing rounds and the field of Ahdab does not enter me with the other topics that he offered there is one of the first of those involved.
Notes :-
1 - The cost of contracts licensing rounds for the past years presented by d. Haytham is not identical to reality, he claims that in the last three years included the budget of $ 24 billion per year, while the maximum allocation in the budget for any year does not exceed 11 billion, Haitham is a member of the Parliamentary Finance Committee for the past four years and knows this more than others.
2 - Unfortunately, some address the issue of costs and never address the subject of revenue that came as a result of these costs, the figures of costs and does not mention the figures of revenue, for example total revenue for oil source for the past six months amounted to 40 billion dollars, including more than 70% While the allocation of costs for the six months mentioned is five billion dollars.
3 - Most of the cost is the cost of capital, ie, up to 60% of the total costs. These costs are buildings, equipment, buildings and equipment, all of which belong to the State from the first day of arrival in Iraqi territory, based on article / 22 of the service contract.
These capital costs are gradually decreasing over time due to the completion of the development phase and only the operational costs, which do not exceed half of the current costs, will remain at all times, while production will increase and therefore there will be high revenues and low costs.
We would like to point out that the period of decline in oil prices 2014-2017 coincided with the period of development of the fields, which led to the emergence of high costs with low revenues and this was not clear in the years before 2014, where revenues were high and costs are low.
4 - The Ministry of Oil has taken a number of years ago measures to reduce the excessive costs by oil companies, including the formation of the team Alklvwi ministerial, which includes representatives of companies and departments of the Ministry of the relationship to conduct the calculation of the costs of the estimates of secondary contracts through the program (Quistr) before the referral of these contracts. As well as reducing the budgets of foreign oil companies in all fields to more than half.
5. All accounts payable to companies and revenues from licensing rounds are in the Department of Petroleum Contracts and Licenses, Sumo Company, the Economic and Financial Department, the Department of Studies, Planning and Follow-up in the Ministry of Oil, the Financial Control Bureau, and the Ministry of Finance and can be consulted instead of relying on other sources.
Note that the Department of Contracts and Licenses has made a presentation on these figures until the end of 2015 on 13/12/2015 in the Constitutional Hall in the House of Representatives in the presence of a large number of deputies from various parliamentary committees and I was part of the delegation of the ministry headed by former Minister of Oil, Abdul Mahdi and I had another presentation on the legal aspects of contracts licensing rounds.
There is also a central ministerial committee called the Audit Committee of the companies of oil companies, which audits the lists of accounts once every three months and submits their recommendations to the Minister for approval and forwarding them to Sumo Company for crude oil payments at the prevailing price at the time. ExxonMobil has been paid only once in cash for $ 200 million.
6 - Unfortunately, there are those who calculate the capital costs that get in one year on the same year shows the cost of the barrel is high, while it must be calculated on the life of the project may be 20 years, for example, if the cost of a billion dollars should be divided into 20 years The cost per year is 50 million and the cost of the barrel is low.
7 - We do not see justice in linking between the holding of the field Ahdab oil and the book of Wasit province of the existence of cases of prostitution or deviation in the field for two reasons:
A - The phenomenon of delinquency is exposed to all areas of Iraq for many reasons, not only Ahdab field and the relationship of the contract in what happens !!!
The handling of deviations and the maintenance of security is one of the duties of the local government in the province of Wasit and not the duties of the Ministry of Oil. The first was the local government to take the appropriate action as the labor, environment, health, residence and other appropriate procedures in the field. Jurisdiction of entry and inspection based on Article 16 thereof.
8. Mr. Hamza Al-Jawahiri, as I know him, is a retired oil engineer and expert who always volunteers to defend the Ministry of Oil by uncovering facts because he has accumulated experience and has no strings attached to the Ministry of Oil.
9 - always challenged some in the contracts of oil licensing rounds without being sure of the information or the presence of text in the contract and this creates confusion and confusion in the recipient.
10 - mixing some rounds of licenses and service contracts and secondary contracts for the implementation of service contracts, and the fact that licensing rounds are the procedures that begin with the announcement of fields and ends with the referral and continue in most rounds for a full year.
The service contracts are the main contracts produced by licensing rounds and the number of 18 contract, signed between the companies of the Ministry of extraction and foreign oil companies. The secondary contracts are the contracts signed between the foreign oil companies and the secondary companies to carry out the work of the field.
If there is a defect or negligence or negligence, it happens in the final stage and this is normal, as is the case in other government contracts, where it is tainted by what is wrong with others.
And not the defect in the tours which is a set of procedures that have expired on time and also not in service contracts which are a set of agreed contractual texts.
11- We hope that anyone who wants to challenge the contracts of petroleum licensing rounds or criticize them to make sure of the information before publishing or advertising them. We also hope that the criticism or appeal is based on objective and professional foundations, not on political or personal grounds.
12- We are surprised by the media attack on contracts of licensing rounds in which companies get 1% of revenue while we do not find any criticism or appeal in the contracts of the region where companies get 15-30% of revenue and this is known to all !!!!!!
With Regards
Dr . Sabah Al Saadi
Advisor to the Ministry of Oil for Legal Affairs
https://oil.gov.iq/index.php?name=News&file=article&sid=2044
Advisor to the Ministry of Oil for Legal Affairs
12/8/2018
Hello ...
I missed watching the episode of the resolution program for you on the channel of the Tigris, which included the meeting with Dr. Haytham Al-Jubouri and Hamzeh Al-Jawahiri and Ali Jbeir on the evening of 6/8/2018. I saw it on YouTube, but I followed the other meeting with Dr. Haytham Jubouri on the second day 7/8/2018 on the channel itself, and we regret the occurrence of an altercation between Mr. Haitham Jubouri and Hamza Jeweler and we wish that the dialogue will continue between them objectively and professionally. I am not a spokesman for the Ministry of Oil and I am not charged with defending them. There are specialized bodies in these fields. I have to defend the truth that is intended to be covered or not to appear, so I think it is my duty to make some observations in my personal view of what presented by d. Haitham al-Jubouri in terms of contracts licensing rounds and the field of Ahdab does not enter me with the other topics that he offered there is one of the first of those involved.
Notes :-
1 - The cost of contracts licensing rounds for the past years presented by d. Haytham is not identical to reality, he claims that in the last three years included the budget of $ 24 billion per year, while the maximum allocation in the budget for any year does not exceed 11 billion, Haitham is a member of the Parliamentary Finance Committee for the past four years and knows this more than others.
2 - Unfortunately, some address the issue of costs and never address the subject of revenue that came as a result of these costs, the figures of costs and does not mention the figures of revenue, for example total revenue for oil source for the past six months amounted to 40 billion dollars, including more than 70% While the allocation of costs for the six months mentioned is five billion dollars.
3 - Most of the cost is the cost of capital, ie, up to 60% of the total costs. These costs are buildings, equipment, buildings and equipment, all of which belong to the State from the first day of arrival in Iraqi territory, based on article / 22 of the service contract.
These capital costs are gradually decreasing over time due to the completion of the development phase and only the operational costs, which do not exceed half of the current costs, will remain at all times, while production will increase and therefore there will be high revenues and low costs.
We would like to point out that the period of decline in oil prices 2014-2017 coincided with the period of development of the fields, which led to the emergence of high costs with low revenues and this was not clear in the years before 2014, where revenues were high and costs are low.
4 - The Ministry of Oil has taken a number of years ago measures to reduce the excessive costs by oil companies, including the formation of the team Alklvwi ministerial, which includes representatives of companies and departments of the Ministry of the relationship to conduct the calculation of the costs of the estimates of secondary contracts through the program (Quistr) before the referral of these contracts. As well as reducing the budgets of foreign oil companies in all fields to more than half.
5. All accounts payable to companies and revenues from licensing rounds are in the Department of Petroleum Contracts and Licenses, Sumo Company, the Economic and Financial Department, the Department of Studies, Planning and Follow-up in the Ministry of Oil, the Financial Control Bureau, and the Ministry of Finance and can be consulted instead of relying on other sources.
Note that the Department of Contracts and Licenses has made a presentation on these figures until the end of 2015 on 13/12/2015 in the Constitutional Hall in the House of Representatives in the presence of a large number of deputies from various parliamentary committees and I was part of the delegation of the ministry headed by former Minister of Oil, Abdul Mahdi and I had another presentation on the legal aspects of contracts licensing rounds.
There is also a central ministerial committee called the Audit Committee of the companies of oil companies, which audits the lists of accounts once every three months and submits their recommendations to the Minister for approval and forwarding them to Sumo Company for crude oil payments at the prevailing price at the time. ExxonMobil has been paid only once in cash for $ 200 million.
6 - Unfortunately, there are those who calculate the capital costs that get in one year on the same year shows the cost of the barrel is high, while it must be calculated on the life of the project may be 20 years, for example, if the cost of a billion dollars should be divided into 20 years The cost per year is 50 million and the cost of the barrel is low.
7 - We do not see justice in linking between the holding of the field Ahdab oil and the book of Wasit province of the existence of cases of prostitution or deviation in the field for two reasons:
A - The phenomenon of delinquency is exposed to all areas of Iraq for many reasons, not only Ahdab field and the relationship of the contract in what happens !!!
The handling of deviations and the maintenance of security is one of the duties of the local government in the province of Wasit and not the duties of the Ministry of Oil. The first was the local government to take the appropriate action as the labor, environment, health, residence and other appropriate procedures in the field. Jurisdiction of entry and inspection based on Article 16 thereof.
8. Mr. Hamza Al-Jawahiri, as I know him, is a retired oil engineer and expert who always volunteers to defend the Ministry of Oil by uncovering facts because he has accumulated experience and has no strings attached to the Ministry of Oil.
9 - always challenged some in the contracts of oil licensing rounds without being sure of the information or the presence of text in the contract and this creates confusion and confusion in the recipient.
10 - mixing some rounds of licenses and service contracts and secondary contracts for the implementation of service contracts, and the fact that licensing rounds are the procedures that begin with the announcement of fields and ends with the referral and continue in most rounds for a full year.
The service contracts are the main contracts produced by licensing rounds and the number of 18 contract, signed between the companies of the Ministry of extraction and foreign oil companies. The secondary contracts are the contracts signed between the foreign oil companies and the secondary companies to carry out the work of the field.
If there is a defect or negligence or negligence, it happens in the final stage and this is normal, as is the case in other government contracts, where it is tainted by what is wrong with others.
And not the defect in the tours which is a set of procedures that have expired on time and also not in service contracts which are a set of agreed contractual texts.
11- We hope that anyone who wants to challenge the contracts of petroleum licensing rounds or criticize them to make sure of the information before publishing or advertising them. We also hope that the criticism or appeal is based on objective and professional foundations, not on political or personal grounds.
12- We are surprised by the media attack on contracts of licensing rounds in which companies get 1% of revenue while we do not find any criticism or appeal in the contracts of the region where companies get 15-30% of revenue and this is known to all !!!!!!
With Regards
Dr . Sabah Al Saadi
Advisor to the Ministry of Oil for Legal Affairs
https://oil.gov.iq/index.php?name=News&file=article&sid=2044