Iraq on Road to Stamping Out Oil Graft

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"Iraq took a step towards leaving its reputation for corruption and misuse of oil cash behind today"

Iraq took a step towards leaving its reputation for corruption and the misuse of oil cash behind today, as the Extractive Industries Transparency Initiative (EITI) board accepted its bid to become a candidate member.

Iraq now has two years to implement EITI standards in financial reporting within its oil sector. It must also undergo validation before it can claim to be EITI compliant.

EITI was set up to set a global standard for transparency in the oil, gas and mining sectors.

Under the initiative, companies disclose the amount they pay in taxes and royalties to the government, while the government in turn makes public the payments it has received.

The Iraqi process will be overseen by a multi-stakeholder group comprising representatives from the federal government, oil companies and civil society.

Torn by years of war and sanctions, Iraq—which sits on the world's third largest oil reserves—relies on oil for 90% of government revenues and has sealed a series of massive deals with major foreign producers to refurbish its neglected oil infrastructure.

Should the push succeed, Iraq looks set to become one of the world's leading oil producers. Baghdad hopes the oilfield services deals will boost its output from 2.5 million barrels per day to around 12 million bpd in six years.

Iraq's Prime Minister Nuri Maliki and the federal Oil Minister Hussain Shahristani announced Iraq's decision to join EITI last month.

At the time, the oil ministry's inspector general Alaa Muhyiddin told reporters: "We want to join this institution to reform the globally damaged reputation of Iraq and the Iraqi government as a country full of corruption."

Afghanistan's application for EITI candidate member status was also accepted by the EITI board at its meeting in Oslo today.

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