Iraq National Oil Company
Encyclopedia
The Iraq National Oil Company (INOC) was founded in 1966 by the Iraqi government. It was empowered to operate all aspects of the oil industry in Iraq
except for refining
which was already being run by the Oil Refineries Administration (1952) and local distribution which was also already under government control.
In 1961 Iraq passed Public Law 80 whereby Iraq expropriated 95% of the Iraq Petroleum Company
's concession
s, and went on to announce the intent to form the INOC in 1964. In 1967 Iraq and the Soviet Union
signed the Iraq-Soviet Protocol which committed the Soviet Union to give technical and financial aid to the company. In 1967 and 1968 the company's purview was expanded to include areas expropriated from the Iraq Petroleum Company.
Unlike the National Iranian Oil Company
, the INOC was forbidden from entering into partnerships or granting concessions to foreign oil companies. Though there was discussion of allowing the French Compagnie Française de Pétroles, from whom the North Rumaila Field
had been appropriated, to enter into a contract to develop the field, ultimately, with the help of the Soviet Union, the INOC opened the field on 7 April 1972.
In 1972 nationalization
was complete. In its first years of sole control INOC managers succeeded in raising production in Iraq from 1.4 Moilbbl/d to over 3 Moilbbl/d in 1980. But the outbreak of war with Iran that year severely hit capacity.
In April 1987, under newly appointed oil minister Issam Chalabi, Decree 267 merged the INOC with the oil ministry, which became the direct operator in the industry as well as its regulator. At an operational level, the single national-level company was broken into a series of regional companies, the largest among them being North Oil Company
, based in Kirkuk
, and South Oil Company
, based in Basra
.
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
except for refining
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
which was already being run by the Oil Refineries Administration (1952) and local distribution which was also already under government control.
In 1961 Iraq passed Public Law 80 whereby Iraq expropriated 95% of the Iraq Petroleum Company
Iraq Petroleum Company
The Iraq Petroleum Company , until 1929 called Turkish Petroleum Company , was an oil company jointly owned by some of the world's largest oil companies, which had virtual monopoly on all oil exploration and production in Iraq from 1925 to 1961...
's concession
Concession (contract)
A concession is a business operated under a contract or license associated with a degree of exclusivity in business within a certain geographical area. For example, sports arenas or public parks may have concession stands. Many department stores contain numerous concessions operated by other...
s, and went on to announce the intent to form the INOC in 1964. In 1967 Iraq and the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
signed the Iraq-Soviet Protocol which committed the Soviet Union to give technical and financial aid to the company. In 1967 and 1968 the company's purview was expanded to include areas expropriated from the Iraq Petroleum Company.
Unlike the National Iranian Oil Company
National Iranian Oil Company
The National Iranian Oil Company , a government-owned corporation under the direction of the Ministry of Petroleum of Iran, is an oil and natural gas producer and distributor headquartered in Tehran. It was established in 1948...
, the INOC was forbidden from entering into partnerships or granting concessions to foreign oil companies. Though there was discussion of allowing the French Compagnie Française de Pétroles, from whom the North Rumaila Field
Rumaila Field
The Rumaila oil field is a giant oil field located in southern Iraq, approximately from the Kuwaiti border. The dispute between Iraq and Kuwait over allegedly slant-drilling in the field was one of reasons for Iraq's invasion of Kuwait in 1990. This field was discovered by British Petroleum in...
had been appropriated, to enter into a contract to develop the field, ultimately, with the help of the Soviet Union, the INOC opened the field on 7 April 1972.
In 1972 nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
was complete. In its first years of sole control INOC managers succeeded in raising production in Iraq from 1.4 Moilbbl/d to over 3 Moilbbl/d in 1980. But the outbreak of war with Iran that year severely hit capacity.
In April 1987, under newly appointed oil minister Issam Chalabi, Decree 267 merged the INOC with the oil ministry, which became the direct operator in the industry as well as its regulator. At an operational level, the single national-level company was broken into a series of regional companies, the largest among them being North Oil Company
North Oil Company
North Oil Company is situated in Kirkuk, Iraq.The North Oil Company is one of the 16 companies comprising the Iraqi Ministry of Oil. Headquartered in Kirkuk, its boundaries extend from the northern borders to the 32.5 degree parallel, just south of Baghdad....
, based in Kirkuk
Kirkuk
Kirkuk is a city in Iraq and the capital of Kirkuk Governorate.It is located in the Iraqi governorate of Kirkuk, north of the capital, Baghdad...
, and South Oil Company
South Oil Company
South Oil Company is a national Iraqi company responsible for the oil in the south of Iraq. It is situated in Basrah, Iraq. South oil company is one of the major fundamental formations of the Iraq National Oil Company...
, based in Basra
Basra
Basra is the capital of Basra Governorate, in southern Iraq near Kuwait and Iran. It had an estimated population of two million as of 2009...
.