Oil Minister`s Questioning by Iraqi Parliament Possible

Oil Minister Hussein al-Shahristani could be facing a parliamentary probe and a possible no-confidence vote, according to various media reports, although there appeared to be no firm news on exactly when the grilling would take place.
Significance: The questioning session comes as the oil minister—whose position has long been seen as one of the strongest in the Iraqi cabinet of Prime Minister Nuri al-Maliki—has been severely weakened by a series of challenges, falling crude production levels (particularly at Iraq’s paramount southern fields), and what appears to have been a deal struck with the autonomous Iraqi Kurdistan region (allowing international oil companies, or IOCs, who have invested in upstream assets directly with the Kurdistan Regional Government (KRG) to export crude) behind his back. These issues, together with the inability to resolve the deadlock in parliament surrounding the Iraqi oil law as the first licensing round draws to a close, has been seen as undermining his position, with al-Maliki possibly mulling the possibility of replacing al-Shahristani with a minister less divisive in order to push through the oil law in the coming months. The absence of an oil law is one of the main issues potentially curtailing IOC willingness to invest in the development of Iraq’s vast oil and gas reserves. Replacing the oil minister could be a significant move to shore up sufficient international investment, but on the other hand doing so just days before the late June licensing-round awards when he has been so instrumental in negotiations leading up to it could be a risky policy in itself. Indeed al-Shahristani has also been somewhat strengthened in the past few days, as oil prices have rebounded and production shown a little—albeit potentially insignificant—increase. Having placed much of his authority in trying to centralise Iraq’s oil production and fight KRG oil autonomy, al-Shahristani might have lost much of his room for manoeuvre should it turn out that a deal has indeed been struck in which the Finance Ministry is compensating the IOCs producing oil in Iraqi Kurdistan according to their original contracts with the region.