Iraq’s first EITI report raises as many questions as it answers
Iraq issued its first report under the EITI mechanism just before the New Year and it was circulated last week in English, Arabic and Kurdish. It’s the first formal deliverable in Iraq’s participation in the transparency scheme since it signed up two years ago. Price Waterhouse Cooper reconciled financial reporting from Iraq’s monopoly oil marketing organisation SOMO, and the 34 companies that bought its oil in 2009 for sums totalling $41.3 billlion. The result is interesting reading but raises as many questions as it answers, about Iraq’s selling process and the various stages in it, why many company reports were submitted without executive sign-off, as stipulated in the process and, most curiously, why the Federal Reserve Bank of New York failed to send account statements for Iraqi oil receipts despite repeated requests over a period of many months. The report follows the EITI norm of building transparency step by step, but a critical point remains because of the unique nature of this first report, which was restricted merely to the sale of oil: will Iraq be asked to report on any of the billions of dollars of activity in the upstream inside the country before it is reviewed for – and possibly granted – compliant status? Here’s an executive summary of our analysis.