Iraqi Oil Minister Thamer al-Ghadhban says that he hopes a new national oil company can be reestablished by the end of the year.

In an interview with Dow Jones Newswires, al-Ghadhban said that the Iraqi Cabinet would approve the structure of the new company and its operations before it could start.

The former Iraq National Oil Co. was abolished by former President Saddam Hussein during the 1980s.

“The aim of the INOC is to separate top decisions, policies, strategic planning (of oil industry), international relations, investment in the oil sector (from oil production, exports and exploration),” al-Ghadhban said, adding that the new INOC would incorporate the current South Oil Co., North Oil Co. and the Exploration Co.

He suggested that an executive director to head the new company and a board of directors.

Earlier, the oil minister said that the country’s crude oil production would be increased next week to nearly 2.6mn barrels a day from the current 2.4mn b/d.

“We are currently producing just over about 2.4mn b/d. We expect an increase next week because we are going to put on stream the north refinery after a major overall (rehabilitation) which was done by our Iraqi staff,” al-Ghadhban said.

Al-Ghadhban said he expected Iraq’s crude oil exports from a northern oil pipeline to Turkey’s Ceyhan port, which has been suspended for almost a month, to run again soon at an average of 350,000 b/d. A spate of attacks against the key pipeline has prevented the country to export from northern oil fields which used to reach around 1.1 b/d before the US-led war that ousted the government of Saddam Hussein.

“Once we have addressed the security issue in the north, then we can resume exports to Turkey for about 350,000 b/d, but this will take sometime…but I hope very soon.”

Iraq is exporting around 1.8mn b/d from southern oil fields via export terminals in the Persian Gulf.

Al-Ghadhban said that his ministry would extend a security contract with South Africa’s Erinys Co, which has been responsible for guarding oil installations since the fall of Saddam’s regime more than a year ago. He said an Iraqi force of more than 14,000 oil police would be expanded.

“The contract with Erinys will expire on August 5…we might extend the contract for a few months,” he said.

Iraq’s oil infrastructure has seen more than 200 acts of sabotage over the last year that prevented the country to generate revenues to rebuild the country after three wars in two decades and 13 years of crippling U.N. sanctions which were lifted only last year.

Some oil analysts say that Erinys has failed to protect Iraqi oil installations. Three sabotage attacks to pipelines in southern Iraq last month and earlier this month had brought Iraq’s oil exports to a standstill for a while.

Al-Ghadhban said the security of oil installations would be run buy Iraqis. “We will definitely put an Iraqi leadership on top of this course. We have started dialogue to select a number of capable Iraqis to run the show.”

He said that the ministry was currently preparing a new policy on the development of oil fields by international companies. This policy would be submitted to the Iraq interim cabinet for approval. “I hope before the end of the year, we will have an approved policy of oilfields development. Then we will start dialogue with international oil companies.”

Iraq has several large oil fields scattered in various parts of Iraq, which need investment, by international companies in order to be developed. These include the giant West Quran, Majnoon, Nahr bin Omar, al-Ahdab and western desert.

Saddam’s regime signed preliminary contracts with Russian, Chinese, Vietnamese, Indian, Indonesian and other nations’ companies to develop some of these oil fields. Work never started because of UN sanctions which banned investment in the Iraqi oil industry.

France’s Total also was negotiating the giant Majnoon and Nahr bin Umr oilfields in the south.

For the time being, the Iraqi interim government will study these contracts and will take decisions, Al-Ghadhban said.

Concerning a US$3bn worth contract with Lukoil that was signed by Saddam’s regime in 1997 and then abolished shortly before the fall of Saddam’s regime last year, al-Ghadhban said there was “nothing new concerning the contract of the giant West Qurna oilfield.”

Al-Ghadhban said he wasn’t planning a major reshuffle of the ministry’s top officials. “If it is requires to change a person here and there, it is normal, but I am not planning major changes at all.”

A few weeks after assuming his post, Ghadhban replaced Shamkhi Faraj as head of the country’s Oil Marketing Co with Dhiaa al-Bukkaa, the minister’s office chief.

Al-Ghadhban said he would head the Iraqi delegation to an OPEC meeting scheduled for July 21 in Vienna to discuss a possibility of increasing oil production of the organisation.