EITI in Iraq

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Iraq signed up to EITI in February 2010 and issued a draft of its first reconciliation report at the start of 2012[1]

Iraq first announced its intent to implement the EITI in 2008 and Deputy Minister Mr Barham Salih met with EITI Chairman Peter Eigen in Baghdad in October 2008[2]. The Iraq EITI (IEITI) Launch Conference took place on 9-10 January 2010, when Prime Minister Nouri al-Maliki announced Iraq's formal candidacy[3]. The first IEITI Stakeholder Council meeting was held on 22-23 September 2010. Civil society was represented by several organisations, and in 2011 formed a coalition grouping more than 40 organisations around the EITI initiative.

On the 12 December 2012 Iraq was declared a "compliant country" by the EITI Board on the basis of a final validation report released in August 2012. According to the official EITI website, protracted and difficult negotiations took place between the IEITI and the Kurdistan Regional Government (KRG), but the 2010 will cover Kurdistan's oil and gas production and revenues, which will be reflected in a separate chapter.[4]

However despite Iraq's history of collaboration with the EITI, Revenue Watch Institute highlights a lack of awareness among civil society, particularly in the northern Kurdish region, as an obstacle.[5]

First Reconciliation Report: December 2011

The first reconciliation report was issued by Iraq's EITI Secretariat on the 23 December 2011. It tallied some $41.3 billion of receipts by the State Oil Marketing Organisation (SOMO) in sales of Iraqi oil to international buyers. It initially showed a discrepancy of $1,090 million between figures reported by SOMO and those of the buying companies but these were all subsequently explained in follow-up consultations, said the report, prepared by Price Waterhouse Cooper.

The report also reconciled the physical quantities of oil sent from Iraq's two main producing companies, North Oil Company and South Oil Company, to SOMO.

The report used a disaggregated system, listing 34 companies which had bought oil from SOMO during 2009 and further breaking up the figures into regional markets. The top three buying companies were the Indian Oil and Gas company, with over four billion dollars worth, ExxonMobil with over three billion dollars, Total with just under three billion dollars, and BP with over two billion dollars.

Company Name SOMO Buyer Variance


INDIAN OIL CORPORATION LIMITED - INDIA 4,695,576,254 4,500,744,731 -194,831,522


CHEVRON PRODUCTS COMPANY 3,425,398,382 3,047,447,462 -377,950,919
EXXONMOBIL SALES AND SUPPLY LLC. U.S.A 3,177,291,327 3,157,920,626 -19,370,701
TOTAL INTERNATIONAL LIMITED – FRANCE 2,965,904,327 2,817,337,283 -148,567,044
CONOCOPHILLIPS INTERNATIONAL TRADING PTE. LTD. 2,737,804,011 2,740,504,520 2,700,509
SINOCHEM INTERNATIONAL OIL (LONDON) CO. LTD 2,392,402,310 2,175,822,577 -216,579,733
BP OIL INTERNATIONAL LIMITED – LONDON 2,300,671,969 2,300,671,969 0
VALERO SUPPLY AND MARKETING COMPANY 1,860,376,364 1,915,077,038 54,700,674
ENI COMPANY 1,780,734,981 1,780,734,981 0
SHELL INTERNATIONAL EASTERN TRADING COMPANY LIMITED 1,775,848,179 1,920,093,763 144,245,584
SK ENERGY EUROPE LIMITED 1,448,268,927 1,300,298,708 -147,970,220
REPSOL YPF TRADING Y TRANSPORT S.A. 1,402,819,238 1,402,819,238 0
KOCH SUPPLY AND TRADING L.P 952,568,079 1,027,146,001 74,577,923
CHINA ZHENHUA OIL CO. LTD. 926,379,176 926,379,176 0
PETROLIO BRASILERIO S.A. – PETROBRAS 812,143,771 812,143,771 0
TURKISH PETROLIUM REFINERIES CORP. (TUPRAS) – TURKEY 809,676,034 809,676,034 0
MITSUBISHI CORPORATION 714,224,287 574,119,369 -140,104,919
COMPANIA ESPANOLA DE PETROLEOS, S.A. (CEPSA) 662,332,305 662,332,305 0
MOTOROIL (HELLAS) 633,929,317 633,929,317 0
UNIPEC ASIA CO. LTD. 606,305,113 606,305,113 0
SOCIETE ANONYME MAROCAINE DE L'INDUSTRIE DU RAFFINAGE (SAMIR) 582,498,450 582,498,450 0
HINDUSTAN PETROLEUM CORPORATION LTD. – INDIA 525,835,196 538,947,117 13,111,921
JX NIPPON OIL & ENERGY CORPORATION 523,078,003 375,129,376 -147,948,627
CHINA NATIONAL UNITED OIL CORPORATION 469,046,369 504,679,862 35,633,493
APIOIL LIMITED 464,853,991 464,853,991 0
PETROVIETNAM OIL CORPORATION (PV OIL) 432,557,987 432,557,987 0
ERG REFFINERIES MEDITERRANEE S.P.A. - GENOA / OTALY 431,827,678 407,768,337 -22,059,341
LUKOIL INTERNATIONAL TRADING AND SUPPLY COMPANY 335,587,059 335,587,059 0
PETRONAS TRADING CORPORATION SDN BHD (PETCO) 300,835,328 300,835,328 0
IPLOM SPA ,REFFINERY IN BUSALLA - GENOA – ITALY 289,776,698 289,776,698 0
TOYOTA TSUSHO CORPORATION 277,730,650 277,730,650 0
SARAS S.P.A. – ITALY 239,062,332 239,062,332 0
PETROGAL S.A. LISBON – PORTUGAL 176,425,620 176,425,620 0
BHARAT PETROLEUM CORPORATION LTD. 119,912,746 119,912,746 0

The report also noted that Price Waterhouse Cooper was supposed to receive confirmation that the sums reported by SOMO were actually deposited in the Federal Reserve Bank of New York, under the arrangement put in place by the UN Security Council, but that the bank had not supplied this confirmation. The report listed some 14 separate discrepancies in reports between SOMO and the buying companies.[6]

Criticism

Energy consultancy OpenOil has criticised the nature of Iraq's path towards EITI compliance, noting that submissions from buying companies were not always signed off by the CEO or CFO as stipulated by EITI rules, and that the Central Bank of Iraq was unable to obtain statements for the Development Fund for Iraqi oil revenues from the Federal Reserve Bank of New York, despite multiple requests over a three-month period. Therefore there was no confirmation that the money received by the Iraqi government ultimately corresponded to the invoices sent out by SOMO. The author also called for a wider scope of implementation before Iraq was granted compliant status.[7]

External Links

Official Website: www.ieiti.org.iq

References

  1. "English IEITI Report" EITI, retrieved 11 January 2012.
  2. "EITI Secretariat's Iraq page" EITI, retrieved 11 January 2012.
  3. "Iraq Joins Global Transparency Effort" PWYP, retrieved 11 January 2012.
  4. "Iraq EITI" EITI', retrieved 15 January 2013.
  5. "Raising EITI Awareness Among CSOs in Iraq’s Northern Kurdish Area" Revenue Watch, retrieved 15 January 2013.
  6. "Reconciliation of cash inflows from the petroleum industry in Iraq in 2009" IEITI, retrieved 11 January 2012.
  7. "Iraq's First Reconciliation Report: Executive Summary" OpenOil, January 2012.