Iraq's Luaibi reverses INOC decree, says it aims to produce 7 million bpd

SULAIMANIYA/ERBIL, Iraq (Reuters) - Iraqi Oil Minister Jabar al-Luaibi has reversed his decision to transfer the ownership of nine state-owned oil companies from the ministry to the newly formed National Oil Company, the ministry said on Saturday.

FILE PHOTO: Iraqi Oil Minister Jabar al-Luaibi speaks during a news conference in Basra, Iraq June 6, 2018. REUTERS/Essam Al-Sudani

He later told state television in an interview that Iraq hopes to produce 7 million barrels of oil a day (bpd) through the National Oil Company and to export 4 million bpd in 2019.

The reversal of the transfer decision would enable the incoming government of Prime Minister-designate Adel Abdul Mahdi to make its own decisions in the oil sector, the ministry said in a statement. Luaibi is the oil minister in an outgoing government led by Prime Minister Haider al-Abadi.

A senior Iraqi oil official told Reuters that Abdul Mahdi had been annoyed by the original transfer decision which had been “made in a rush and without his approval.”

Luaibi had issued a decree on Thursday transferring ownership of the nine state-owned oil companies, including state oil marketer SOMO, to the National Oil Company.

On the same day, Abdul Mahdi, who has the task of forming a new government after months of political deadlock following a May election, called on officials in the outgoing government to refrain from signing urgent contracts, making non-essential hires, or other key decisions.

The Iraqi government last week named Luaibi as head of the new company, which is to serve as an umbrella organization for state oil firms. Luaibi currently holds both the position of minister and that of company chief.

Parliament voted in March to set up the company, which is meant to manage Iraq’s upstream operations and free up the ministry to be able to set plans and strategies for developing the sector.

In an interview with state television on Saturday night, Luaibi said Iraq hoped to export 1 million bpd through Jordan’s Akaba port, without specifying a timeline.

The burning of gas produced as a byproduct of oil extraction would stop by 2021, he said. The northern refinery of Baiji was brought back online and is producing 70,000 bpd, Luaibi added.

Reporting by Ahmed Rasheed; Writing by Ahmed Aboulenein; Editing by Richard Balmforth and Adrian Croft