Iraq looks to raise profile with OPEC candidate

by Prashant Rao

Note: This article was originally published by AFP on June 12, 2012. It can be found in full here.

BAGHDAD (AFP) – As Iraq increases oil output and emerges as a key supplier, it is now pushing a candidate for OPEC secretary general, part of efforts to boost its profile and retake a big role in the cartel it helped found.

Baghdad had for decades stood on the sidelines of the Organisation of Petroleum Exporting Countries (OPEC) as a result of conflict and sanctions during the rule of Saddam Hussein, and the violent aftermath of his overthrow, highlighted by Iraq’s removal from OPEC’s national production quota system.

But in recent years, Iraq has opened its oil sector to development by foreign firms and increased its crude production, with further dramatic increases in the works.

And although any successful candidate for the job requires unanimous approval from the cartel’s member states, meaning agreement on any of the four proposed names is far from a sure thing when the 12-country grouping meets on June 14, the mere fact that an Iraqi candidate is in the mix marks a sea change.

Baghdad’s candidate, Thamir Ghadhban, is widely lauded as a well-qualified technocrat who led the country’s oil sector during, arguably, its most difficult period in the years following the 2003 US-led invasion.

After the invasion, Ghadhban was named chief executive of Iraq’s oil industry, and subsequently adviser to the oil minister before himself becoming the minister in 2004.

The 67-year-old, who holds a Master’s degree in petroleum reservoir engineering from Britain’s prestigious Imperial College London, worked in Iraq’s oil industry for upwards of 30 years before more recently heading Prime Minister Nuri al-Maliki‘s advisory committee.

Ghadhban is pitted against three other candidates, proposed separately by Saudi Arabia, Iran and Ecuador. Of the four, only Saudi Arabia’s candidate is not a former oil minister, a position OPEC secretary generals have traditionally held at some point.

“Thamir’s own merits are so obvious that he’s a great candidate,” Venezuela’s former oil minister Alirio Parra told AFP by telephone from London. “Over the years, I have dealt with him lots. He has all the qualities that are necessary.”

But Parra cautioned that the unanimity requirement made any predictions over who would win the election complicated.

“There are four candidates, so you cannot say there is a frontrunner,” said Parra, who as a candidate for OPEC secretary general in 1994 fell victim to the unanimity rule when he secured the support of all cartel member states except for one.

“Don’t expect results overnight. It is very difficult indeed for candidates to be elected.”

For Iraq, the election offers a chance for it to retake a leadership role in OPEC, which was founded in Baghdad in September 1960 with it as one of six member countries.

Since OPEC’s founding, only one Iraqi has held the position of secretary general — Abdul Rahman al-Bazzaz, who manned the post for a year from 1964. Fadhil al-Chalabi was acting secretary general from 1983-88.

And with Iran and Saudi Arabia traditionally holding opposing positions within OPEC, there is potential that Ghadhban could emerge as a compromise candidate of sorts.

According to one analyst, OPEC would benefit from Iraq being in the lead.

“Putting Iraq in a position of responsibility means it has to act responsibly towards everyone,” said Ruba Husari, editor of www.iraqoilforum.com.

She added, alluding to Iraq’s current production and large projected increases in coming years, and its accompanying ability to affect oil markets: “Instead of having a classroom with a (potential) rebel, you put him in charge, so (he thinks), ‘we have to satisfy everyone’.”

Iraq currently exports around 2.45 million barrels per day (bpd), but this figure is set to increase dramatically in the coming years.

For now, Iraq remains a member of OPEC but does not have a national quota for oil production, and Iraqi oil officials have mooted the possibility of opening quota negotiations with the cartel once production increases to between four to five million bpd.

It is projected to hit those figures from around 2015 onwards, and with OPEC secretaries general serving a maximum of two three-year terms, such negotiations could conceivably open with an Iraqi at the helm, were Ghadhban successful.

“They should accommodate Iraq, especially at a time when quotas will be discussed,” an Iraqi oil official said, speaking on condition of anonymity.

“They (OPEC member states) should take Iraq on board, and in reality they should reward Iraq with this post, rather than block it.”

“Iraq has been, in the past, marginalised” within OPEC, the official said. “Now Iraq is back.”

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