Kurdish Officials to Back Iraq Oil Law
2/24/2007, 1:56 p.m. CT
By YAHYA BARZANJI
The Associated Press
SULAIMANI, (Southern Kurdistan) (AP) — Kurdish authorities have agreed to back a
draft law to manage and share Iraq's vast oil wealth, removing the last major
obstacle to approving the measure and meeting a key U.S. benchmark in Iraq, a
top Kurdish official said Saturday.
Approval of a new oil law could help open the way for international oil
companies to invest billions to upgrade Iraq's decrepit wells and pipelines and
exploit the country's reserves, among the world's largest.
The bill also provides a formula for distributing revenues among all major
ethnic and religious groups, easing Sunni fears of being cut out of a future
bonanza because their central and western homelands lack extensive reserves.
Massoud Barzani, president of the
self-governing Kurdish administration in the north, announced the agreement at a
joint press conference with U.S. Ambassador Zalmay Khalilzad and President Jalal
Talabani. Barzani said he and Talabani had discussed the latest draft law by
telephone with Prime Minister Nouri al-Maliki.
"We reached a final agreement," Barzani said. "We accept the draft."
There was no comment on the announcement from Khalilzad or Talabani, and Barzani
did not elaborate. It was unclear whether new concessions had to be made to win
his approval.
Al-Maliki's government had promised to enact a new oil law by the end of 2006
but missed the deadline due to objections from the Kurds, who wanted a greater
role in awarding contracts and administering the revenues.
The Cabinet discussed the draft Thursday but failed to agree. Once the Cabinet
signs off, the measure goes to parliament for final approval once the
legislators return from a recess early next month.
The Bush administration, facing growing pressure to end the Iraq conflict, has
been urging the Iraqis to finish the new oil law.
A new law is needed, most outside experts believe, to encourage international
companies to pour billions into Iraq to repair pipelines, upgrade wells, develop
new fields and begin to exploit the country's vast petroleum reserves, estimated
at about 115 billion barrels.
According to
Iraqis familiar with the deliberations, the draft law would offer
international oil companies several methods to invest, including
production-sharing agreements. Those would give U.S. and other international
companies a substantial share of the oil revenues to recover their initial
investments and then allow them big tax breaks.
That angers some
Iraqis, who believe foreigners will get too much control of the nation's
wealth.
But the biggest
battle is over who gets the most say in awarding contracts and managing the
revenues. The Kurds, who have run their own mini-state in the north since
1991, want regional administrations to have a bigger role.
Most of the
country's proven oil reserves lie in the Kurdish north or the Shiite south,
which also wants to establish a self-ruled region. That has led the Sunnis to
demand more power for the central government, to assure them a share of the
wealth.
To win Kurdish
approval, the current draft gives a major role to the regional administrations
in awarding contracts but allows a committee under the prime minister to
review them.
To satisfy the
Sunnis, oil revenues would be distributed to the 18 provinces based on their
populations - not on whether they have oil. It's unclear whether Sunni Arabs
would accept a population-based formula since they have consistently
challenged figures showing them as a minority.
While the Kurds
want more control of revenue generated from their fields, others think the new
proposals give the regions too much control.
If implemented,
"The balance of power in the management of Iraq's oil and gas resources would
have shifted alarmingly from the center to the regions," Tariq Shafiq, a
former oil official who helped draft the first version, said in Amman, Jordan,
this month.
