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Iraqi Cabinet Delays Approval Of Hydrocarbon Law - Sources



By Hassan Hafidh, Of Dow Jones Newswires

The Iraqi cabinet failed to ratify a proposed hydrocarbon law during a session held Thursday, signaling a lack of agreement between the central government in Baghdad and the Kurdish authority in the north over who should sign oil contracts with international companies, Iraqi oil industry sources said Friday.

"The cabinet met with the committee entrusted with drafting the oil and gas law but they haven't reached a consensus yet," one Iraqi oil official told Dow Jones Newswires.

The cabinet was supposed to ratify the controversial law Thursday before submitting it to the parliament for final approval.

Sources close to the cabinet session held Thursday said that the Kurds still insist that they should negotiate and sign contracts with international oil companies to develop oil fields in their own territory.

A recent copy of the draft law, seen by Dow Jones Newswires, states that a representative from the federal government in Baghdad should take part in these negotiations and that a federal oil and gas council should approve any contract signed by the Kurds.

The committee drafting the law has been meeting over the last five months without reaching a consensus. Negotiations have snagged because of the insistence by the Kurds that they maintain a degree of autonomy in managing their northern fields, the sources said.

The law still faces strong opposition from members of the Iraqi government and prominent Iraqi oil technocrats and ex-officials.

The head of the Iraqi oil trade union Hassan Jumaa described the law as " unbalanced and incoherent with the hopes of those who work in the oil industry."

In Amman, prominent former Iraqi oil officials called on the Iraqi government to postpone issuing the measure until the security situation improves.

They urged the Iraqi government not to sign production-sharing agreements, or PSAs, with foreign companies until security prevails in the country.

They have also voiced opposition to a number of articles in the controversial draft.

-By Hassan Hafidh; Dow Jones Newswires; + 962 777 612 111; [e-mail]

The Iraqi cabinet failed to ratify a proposed hydrocarbon law during a session held Thursday, signaling a lack of agreement between the central government in Baghdad and the Kurdish authority in the north over who should sign oil contracts with international companies, Iraqi oil industry sources said Saturday.

("Iraqi Cabinet Delays Approval Of Hydrocarbon Law - Sources" at 8:09 a.m. EST, incorrectly reported that the sources spoke on Friday)


(END) Dow Jones Newswires
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