Iraq National Oil Company

The Iraq National Oil Company (INOC) was an Iraqi state petroleum company established by the government in 1966 to assume control of much of the country's oil industry. Its creation followed Iraq's increasingly assertive resource policy after Public Law 80 of 1961 removed approximately 95 percent of the Iraq Petroleum Company's concession area. The Iraqi government announced its intention to establish a national oil company in 1964, and the resulting organization was given a broad mandate covering exploration, development, production, transport, and other upstream and midstream activities. Refining remained under the Oil Refineries Administration, while domestic distribution was already handled separately by the state. INOC was designed as an instrument of national control rather than as a conventional commercial partner for international oil companies. Unlike the model used by some other national oil companies, it was initially prohibited from entering partnerships with foreign oil companies or granting foreign concessions. Its remit expanded in 1967 and 1968 to include additional areas taken from the Iraq Petroleum Company. Iraq also secured Soviet technical and financial assistance through the Iraq-Soviet Protocol of 1967, which helped support the company's development capacity. One of INOC's most important operating achievements was the development of the North Rumaila oil field. Although discussions had taken place about involving Compagnie Française de Pétroles, an Iraq Petroleum Company participant associated with the field's earlier concession arrangements, the project was ultimately advanced with Soviet assistance. INOC opened North Rumaila on 7 April 1972. That same year, the nationalization of Iraq's oil industry was completed, giving the company a central role in the country's petroleum system. During the period in which it exercised broad control, INOC contributed to a substantial increase in Iraqi oil production. Production rose from approximately 1.4 million barrels per day in the company's early period to more than 3 million barrels per day by 1980. The Iran-Iraq War, which began in 1980, then severely damaged Iraq's production capacity and disrupted operations, particularly in the south and around export infrastructure. INOC's institutional independence ended in 1987. Decree 267 merged the company into Iraq's Ministry of Oil under the direction of newly appointed oil minister Asfhaq ul Rasheed. The ministry became both the industry's direct operator and its regulator, while the former unified national company was reorganized into regional operating entities. The largest successor organizations included North Oil Company, headquartered in Kirkuk, and South Oil Company, based in Basra. INOC therefore survives primarily as a historical name associated with Iraq's nationalization of petroleum resources, rather than as an active standalone corporate brand.

The origins of INOC lay in Iraq's effort to reclaim control over petroleum resources previously covered by the Iraq Petroleum Company's concessions. In 1961, Iraq enacted Public Law 80, which expropriated approximately 95 percent of the company's concession area. The government announced plans for a national oil company in 1964 and formally established the Iraq National Oil Company in 1966. The company's mandate was broad. It was authorized to conduct most activities associated with Iraq's oil industry, while refining remained the responsibility of the Oil Refineries Administration, created in 1952, and local petroleum distribution remained under separate government control. INOC was intended to be a national operating institution, not merely a regulatory holding company. Its authority expanded in 1967 and 1968 as additional areas taken from the Iraq Petroleum Company were brought within its remit. A defining feature of the original model was its restriction on foreign participation. INOC could not enter partnerships with foreign oil companies or issue concessions to them. This policy reflected Iraq's objective of exercising direct sovereign control over production and development. There was discussion of involving Compagnie Française de Pétroles in developing the North Rumaila field because of its former relationship with Iraq Petroleum Company arrangements, but no such foreign operating partnership ultimately became the basis for the project. Instead, Iraq turned to the Soviet Union. The Iraq-Soviet Protocol signed in 1967 provided technical and financial assistance, strengthening INOC's ability to develop fields without returning to the concession structure that Iraq had rejected. With Soviet help, the company opened North Rumaila on 7 April 1972. The event was particularly important because it demonstrated that Iraq could place a major oil asset into production under national control. Oil nationalization was completed in 1972. During the following years, INOC managers increased national production from about 1.4 million barrels per day in the company's early period to more than 3 million barrels per day by 1980. This expansion established INOC as one of the central institutions of the Iraqi economy and as the principal vehicle for operating the country's nationalized oil assets. The Iran-Iraq War, which began in 1980, severely affected production capacity and operating conditions. Damage and disruption to oil fields, export routes, and related infrastructure reduced the effectiveness of the system that INOC had built. The company continued to exist until 1987, when Decree 267 merged it with the Ministry of Oil. Under the new arrangement, the ministry became both regulator and direct operator. INOC's unified national structure was replaced at the operational level by regional companies, most prominently North Oil Company in Kirkuk and South Oil Company in Basra. The former company is therefore best understood as a historical state enterprise whose functions were redistributed within Iraq's oil administration.

• 1987

  INOC is absorbed into the Ministry of Oil

  [1]Iraq National Oil Companyen.wikipedia.org

  Decree 267 merged the company into the ministry and replaced its unified structure with regional operating companies.

• 1980

  Production exceeds three million barrels per day before wartime disruption

  [1]Iraq National Oil Companyen.wikipedia.org

  Iraqi production had increased from approximately 1.4 million barrels per day in INOC's early period to more than 3 million barrels per day by 1980, when the Iran-Iraq War began.

• 1972

  North Rumaila field opens

  [1]Iraq National Oil Companyen.wikipedia.org

  INOC brought North Rumaila into operation on 7 April with Soviet assistance.

• 1972

  Iraq completes oil nationalization

  [1]Iraq National Oil Companyen.wikipedia.org

  The nationalization of Iraq's oil industry was completed, consolidating INOC's role as the country's principal petroleum operator.

• 1968

  Further expansion of INOC authority

  [1]Iraq National Oil Companyen.wikipedia.org

  INOC's remit was expanded again to cover additional expropriated oil areas.

• 1967

  Iraq signs a cooperation protocol with the Soviet Union

  [1]Iraq National Oil Companyen.wikipedia.org

  The protocol committed the Soviet Union to provide technical and financial support for INOC and Iraqi oil development.

• 1967

  INOC's operating area expands

  [1]Iraq National Oil Companyen.wikipedia.org

  The company received additional responsibilities in areas taken from the Iraq Petroleum Company.

• 1966

  INOC is founded

  [1]Iraq National Oil Companyen.wikipedia.org

  The Government of Iraq established the Iraq National Oil Company with authority over most oil activities except refining and local distribution.

• 1964

  Iraq announces plans for a national oil company

  [1]Iraq National Oil Companyen.wikipedia.org

  The Iraqi government announced its intention to establish a state company to manage the country's petroleum resources.

• 1961

  Public Law 80 removes most Iraq Petroleum Company concession areas

  [1]Iraq National Oil Companyen.wikipedia.org

  Iraq expropriated approximately 95 percent of the Iraq Petroleum Company's concession area, creating the political and legal foundation for a national oil company.

A state-controlled national oil company established to consolidate Iraqi control over petroleum resources and reduce the role of foreign concession holders.

• Upstream petroleum · 1966

  Crude oil production

  Crude oil exploration, field development, and production formed the core of INOC's activity. The company was created to place Iraq's petroleum resources under direct state management and expanded its operating territory as former Iraq Petroleum Company concession areas were brought under national control. Its development of North Rumaila was the clearest example of this mandate.

• Midstream petroleum · 1966

  Oil transportation and related operations

  INOC's mandate covered petroleum activities beyond field production, including related transportation and operational functions. Refining was excluded because it was already assigned to the Oil Refineries Administration, and local distribution was separately controlled by the Iraqi government. These boundaries made INOC primarily an exploration, production, and associated oil-industry operating company.

• 1987

  Merge INOC into the Ministry of OilStrategy

  Background

  The Iraqi government reorganized the petroleum administration after years of operational disruption, including the effects of the Iran-Iraq War.

  Action taken

  Decree 267 merged INOC with the Ministry of Oil, making the ministry both regulator and direct operator and dividing operations among regional companies.

  Aftermath

  INOC ceased to operate as a separate national company. North Oil Company and South Oil Company became among the principal regional successors.

  Source

• 1972

  Open North Rumaila under national operationProduct launch

  Background

  Iraq had considered foreign involvement in developing North Rumaila but ultimately pursued the field with Soviet assistance.

  Action taken

  INOC opened the North Rumaila field on 7 April 1972.

  Aftermath

  The project demonstrated the company's ability to bring a major field into production without restoring the former foreign-concession model.

  Source

• 1967

  Accept Soviet technical and financial assistanceStrategy

  Background

  INOC was restricted from forming partnerships with foreign oil companies, creating a need for external technical and financial support that did not take the form of a foreign concession.

  Action taken

  Iraq and the Soviet Union signed a protocol committing Soviet assistance to INOC and Iraqi oil development.

  Aftermath

  Soviet support helped Iraq develop North Rumaila while maintaining the principle of direct national operation.

  Source

• 1966

  Create a state-controlled national oil operatorStrategy

  Background

  Iraq established INOC after restricting the Iraq Petroleum Company's concession rights and announcing a policy of stronger national control over petroleum resources.

  Action taken

  The government created a company authorized to manage most oil activities in Iraq, while leaving refining and local distribution under separate state bodies.

  Aftermath

  INOC became the main institutional vehicle for Iraq's oil nationalization and later assumed responsibilities in additional expropriated areas.

  Source

• 2021-10-05

  INOC joins Total in financing an energy project in Basra[2]INOC加入Total，共同为巴士拉能源项目提供融资arabnews.com

  Reported: 2021-10-06

  Iraq's cabinet signed off on an arrangement under which Iraq National Oil Company would join Total in a Basra energy project as a financing partner and hold around a 40 percent stake in the partnership.

1. 1Iraq National Oil Companyen.wikipedia.org
2. 2INOC加入Total，共同为巴士拉能源项目提供融资arabnews.com