Sectarian And Ethnic Lines In Sand Stall Provision Of Iraqi Oil Law

Sectarian And Ethnic Lines In Sand Stall Provision Of Iraqi Oil Law
December 15th, 2006  
Team Infidel

Topic: Sectarian And Ethnic Lines In Sand Stall Provision Of Iraqi Oil Law

Sectarian And Ethnic Lines In Sand Stall Provision Of Iraqi Oil Law
New York Times
December 15, 2006
Pg. 16

By Edward Wong
BAGHDAD, Dec. 14 — Iraqi politicians and ministers are divided along ethnic and sectarian lines over a critical provision in a proposed national oil law, according to the country’s oil minister. If the differences can be bridged, the draft could be unveiled soon, the minister, Hussain al-Shahristani, said this week.
The oil law, along with security, is considered a prerequisite for attracting the foreign investment that Iraq’s oil sector desperately needs. The law would set guidelines for development contracts for as many as 60 oil fields in the country, Mr. Shahristani said in an interview.
The law is also a crucial step in the process of national reconciliation, American and Iraqi officials said, because it sets out rules for the equitable distribution of the country’s oil wealth. That, in turn, could ease tensions over granting greater autonomy to Iraq’s regions.
Sunni Arabs, who dominate the oil-poor areas of western Iraq, have opposed regional autonomy because they believe they would not get a fair share of the country’s oil wealth, which is concentrated in the Shiite south and the Kurdish north. Although agreement has been reached on the sharing of oil revenues, representatives of the main Sunni Arab, Shiite and Kurdish political blocs remain at odds over the issue of control over contracts to develop oil fields, Mr. Shahristani said. The representatives sit on a committee that is reviewing a draft of the law written by the Oil Ministry.
The sticking point is regional versus central government control over the contracts. The Sunni Arabs want the central government’s Oil Ministry to negotiate and approve development contracts, while the Kurds want the regional governments to have those powers, said Mr. Shahristani, a conservative Shiite. The Shiites fall in between; they say the law should permit each region to negotiate its own contracts, but they want the contracts to be subject to the approval of a proposed Federal Oil and Gas Council, Mr. Shahristani said.
American officials here have been increasing pressure on the Iraqis to present a draft of the law, and perhaps even approve it, by the end of the year. In its report, the Iraq Study Group said that an equitable distribution of oil wealth was necessary for national reconciliation, and recommended that the central government keep control of revenues and oil fields, to the chagrin of the Kurds, who insist on maximum autonomy.
Once the oil law is in place, the federal council will announce a round of bids for the development of fields that have been identified but are not producing, Mr. Shahristani said. Iraq has 80 known fields, 20 of which are producing oil and will be developed by the Iraq National Oil Company, he said. Development of the others would be offered up for bids.
Oil contracts signed with foreign companies by Saddam Hussein’s government would be reviewed by the federal council to see whether they should be honored or scrapped, Mr. Shahristani said. The various parties have agreed that oil revenues will be allotted to the regions through the central government’s budget process, he said. That means the central government would be able to use money to finance its needs before giving the rest to the regions. Earlier in the negotiations over the oil law, the Kurds had insisted that the revenues be automatically divided and distributed to the regions first.

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