Iraq Oil and Gas Law caught in a bitter row
Wednesday, February 20, 2008 08:16 GMT
Though all Iraqi parties have agreed that Oil and Gas law is vital to securing foreign investment to boost Iraq's oil output and rebuild its shattered economy, the law remains stalled by bitter wrangle between Baghdad and the Kurdistan region over who is entitled to control the fields and how revenues will be shared
A US official in Baghdad, who asked not to be identified, noted that ratifying Oil Law requires the political will to reach the kind of compromises both sides need to make to achieve this. He added that there is a possibility to solve rows over sharing revenues, yet the issue of existent and future contracts remains the major hindrance. US officials said the main reason foreign oil companies are avoiding Iraq is the lack of the law, not security concerns.
“The law has been debated for a year, that's long enough. If we want Iraq's economy to stand on its own feet, then we should pass it as soon as possible,” Ali Hussain Balou, head of the parliamentary oil and gas committee, told Reuters.
Balou hoped a final draft would be ready for debate in parliament when the legislature returns from its winter recess in the third week of March, although such hopes have been shattered many times before.
He revealed as well that Kurdistan regional government Prime Minister Neshervan Barazani will soon visit Baghdad for talks on the law mainly regarding four debated annexes that had previously been drafted to solve the wrangle between Baghdad and Kurdistan over control of oil fields and contracts. The first two annexes include developed and partially developed fields of Iraq’s proven reserves. Annex III covers undeveloped fields, while Annex IV lists 65 exploration blocks.
Another controversial key issue is the federal oil council that the oil ministry wants to manage the industry. In this context, Kurds view that the council is taking over too much control.
For his part, Vice President of parliament’s oil and gas committee Abdul Hadi Al Hasani said the Kurds were rising up tension by signing oil deals with foreign firms, considered by Baghdad as illegal contracts. “The controversy is about the interpretation of regional authorities to control oil fields. The Kurds insist these annexes are not essential and the draft can be passed without them. That is unacceptable”, Al Hasani said.
On the other hand, Iraq’s Oil Ministry said that more than 70 international firms have registered to compete for tenders to help develop Iraq’s oil reserves. Oil Ministry spokesman Asim Jihad told Reuters that Iraq is going to carefully study and check the documentation and will declare next month the companies which are permitted to work in Iraqi oil fields.
AI
