BAGHDAD, July 10 (UPI) -- Iraqi Oil Minister Hussain al-Shahristani faces an uphill battle to continue his tenure amid a tense political climate and a beleaguered contract auction.
Iraqi Prime Minister Nouri al-Maliki appointed Shahristani in 2006 to breathe new life into the dilapidated oil and gas sector in Iraq, which crumbled in the latter years of the Saddam Hussein dictatorship.
Iraq in 2008 was forced to make drastic cuts to its federal budget as oil prices plummeted from peak summer highs of $147 to below $50 per barrel. Iraq relies on oil revenue to back 95 percent of its federal budget.
Shahristani, facing intense criticism in Parliament, in June launched a bidding round for international oil companies to compete for 20-year service contracts to tap the vast oil reserves in Iraq, the first such effort since Saddam expelled foreign oil companies in 1972.
But that effort was met with little interest, with only BP and China National Petroleum Corp. reaching agreements on Iraqi oil reserves. Other foreign companies balked over the deals because of government payment terms, while others cited lingering violence as a reason to stay away.
With Iraq gearing up for national elections in January, the political stakes are mounting on Shahristani to turn the energy sector around, reports Emirati newspaper The National.
