Iraqi minister in line to take powerful new post

Iraq creates energy deputy PM post for its outgoing oil minister as Kurds demand a federal oil law.

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The Iraqi governing coalition led by Nouri al Maliki, the prime minister, will create a new senior energy post for Dr Hussein al Shahristani, who is currently serving as both the minister of oil and the acting minister of electricity.

Dr al Shahristani, a key supporter of Mr al Maliki and a fellow member of his State of Law electoral coalition, has been approached for the new position of deputy prime minister for energy in the next Iraqi government, according to Iraq Oil Report, an independent news website reporting from within the country.

"We have agreed within the coalition that Dr al Shahristani will be the deputy prime minister for energy issues, which include oil and electricity issues," Kamal al Saidi, a top official in Mr al Maliki's Dawa party, told the website.

The appointment has received the consensus blessing of the entire Iraqi pan-Shiite bloc, he said.

The bloc includes State of Law and the coalition representing the followers of the Shia cleric Moqtada al Sadr and the Islamic Supreme Council of Iraq. It holds 159 seats in Iraq's parliament, just short of the 163 seats needed for a majority.

If accepted, the move could entrench Dr al Shahristani as Iraq's top energy official with broad powers to direct policy in a country seeking to become one of the world's biggest three oil exporters by 2017.

Meanwhile, the oil ministry could be transformed into an energy regulator, ceding its policy role to the new deputy prime minister's office and its technical role in oil operations to a proposed Iraqi national oil company.

Iraq Oil Report suggested Dr al Shahristani is effectively being promoted to the "shadow prime minister" role currently held by Thamir Ghadhban, the former Iraqi oil minister who heads the country's economic, energy and strategic policy council, reporting to the prime minister.

Mr Ghadhban "has been performing a job that appears to be supplanted" by the new energy post, the website said.

He is rumoured to be seeking to be named the head of the national oil company that would be formed after an oil law is passed.

On Monday, Ali al Dabbagh, the Iraqi government spokesman, said the new Iraqi government would make passing the law a priority.

Mr al Dabbagh said yesterday Iraq had approved a 93 trillion Iraqi dinars (Dh291.77 billion) draft federal budget for next year, based on an oil price of US$73 per barrel and average crude output of 2.25 million barrels per day (bpd). The export estimate included 150,000 bpd from the Kurdish region, which would materialise only if the Kurds and Baghdad resolved a long-running dispute that has held up the oil law.

"The Kurds have made sure to maintain a kingmaker position in the Iraqi parliament," said Samuel Ciszuk, the senior Middle East oil analyst with IHS Global Insight.

Iraq's draft budget, which needs parliamentary approval, is 9 per cent higher than last year's spending plan. It forecasts government revenue of 78.7tn dinars, leaving a deficit of 14.3tn dinars that would be covered mostly by borrowing and sales of government assets. Supplementary payments of 1.6tn dinars had been set aside for oil-producing provinces.

The country is seeking to raise oil production capacity from its estimated 143 billion barrels of oil reserves to between 8 million and 12 million bpd by 2017.

Analysts have suggested 6 million bpd of capacity could realistically be achieved, which would still make Iraq the third-biggest oil exporter after Russia and Saudi Arabia.