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Iraq's Cabinet sends hydrocarbon law to parliament

Iraq's Cabinet sends hydrocarbon law to parliament

Iraq's long-stalled oil and gas law has finally been sent by the Cabinet to parliament for discussion, a lawmaker said on Sunday.
The move sets the stage for a new public debate over how to manage the country's vast oil wealth, which Iraq needs to finance the reconstruction of the country, even as world oil prices have been falling.
Abdul-Hadi al-Hassani, the deputy chairman of the parliamentary committee on oil, gas and natural resources, said the panel is reviewing the bill to prepare it for the full legislature.
"We started working on it today," al-Hassani told The Associated Press in a phone interview Sunday. He did not say when it will be put to the floor.
Iraq's Cabinet endorsed the bill in February 2007 but disputes later emerged between the Kurds and central government, mainly over who has the final say in managing oil and gas fields.
Since then, the measure has gone through four versions.
Al-Hassani said the Cabinet has agreed to work with the first version since the later ones sparked even more differences.
Among other things, the law would set the rules for foreign investment in Iraq's oil industry and determine how oil revenues will be shared among Shiites, Sunnis and Kurds.
It would also call for establishing a federal council for oil and gas to study plans to develop the oil industry infrastructure and review the contracts.
The inability of Iraq's government to push through the oil legislation has been a major frustration to the United States, which believes a new law is essential to promoting reconciliation among Iraq's Sunni, Shiite and Kurdish populations and win major foreign investment.
But oil prices have fallen 56 percent since July due to the world economic crisis.
Light, sweet crude for December delivery fell $3.69 to settle at $64.15 a barrel on the New York Mercantile Exchange on Friday.
The law has four appendixes that would divide Iraq's oil fields into four categories according to their level of development and who will manage them.
The first appendix lists 27 oil fields mainly in southern provinces of Basra and Maysan, which are already pumping oil but need further development. The second category is the 25 oil fields that are near to producing.
The Iraq National Oil Company, which had been suspended under Saddam Hussein and would be revived by the law, would manage these two categories and negotiate development deals for them with foreign companies.
Twenty-six fields in the provinces of Muthanna, Anbar, Sulaimaniyah, Tamim, Najaf and others fall into the third category of difficult and expensive development and are not close to producing.
The oil ministry will negotiate and sign preliminary contracts with foreign companies over these fields _ except those that are in the northern semiautonomous Kurdish area and will be controlled by the Kurds.
The fourth appendix names 65 blocs yet to be explored in Iraq. Those include 40 in Iraq's Sunni Anbar province, west of Baghdad. The Kurdish regional government will control blocs within its territories while Baghdad will control the rest.
Finally, all contracts of the third and fourth categories need to be discussed and approved by the federal oil and gas council, a matter that Kurds oppose.
Since the 2003 U.S.-led invasion of Iraq, the Kurds have signed more than 20 production-sharing contracts with handful of international oil companies.
Those contracts are considered illegal by the Iraqi Oil Ministry, which has threatened to exclude and blacklist companies that sign deals with the Kurds.
The Kurds maintain they are legal.
"These contracts must be reviewed and then amended, if needed, to bring them in line with the proposed law," said al-Hassani, adding that discussions between the Kurds and central government will continue despite sending the bill to parliament.


Updated : 2021-04-11 21:27 GMT+08:00