Sabtu, Desember 23, 2006

Iraqi officials reached a tentative agreement on the oil law

Iraq is in great need for foreign investment to revive its shattered economy, which relies heavily on revenues from oil exports, especially that the country has the third largest oil reserves in the world.

Sources close to the negotiations said that Prime Minister Nuri al-Maliki, "agreed on" the draft law which is awaiting the political approval and the adoption of the Cabinet.

The source added that the law calls for the formation of a national council of oil headed either by the Prime Minister or the Deputy Prime Minister and has the right to reject deals of oilfields.

A source said that "regions will negotiate within the framework of specific standards and models of investment determined by the Federal Council of oil and gas ... In the presence of a representative of the Council".

He added, "If a contract is rejected but the region insisted on it, a body of independents experts will be appointed for arbitration".

The sources added that the Minister of Oil, the Central Bank Governor, representatives from each region and experts in the fields of oil, finance and the economy will be members in the Council.

The source said "the government of Kurdistan, accepted the review of its existing contracts to be consistent with the law".

The issue of contracts is important for the future of Iraq since reaching a solution for the benefit of the regions would transfer authority over these valuable resources to the Shiites, who represent the majority, and the Kurds whose lands include the largest oilfields in the country.

The Sunni minority, which dominated the country in the era of Saddam Hussein till the invasion led by the United States in 2003, fears that this solution will leave them nothing.

The sources said, "Contracts would not apply unless they are approved at by the council within a period of 60 days".

The sources said that the law calls for the conversion of the two Iraqi oil companies, turning into a holding company that has its own production units for managing the different areas of the sector.

According to the law, the oil policy will be determined at the central level and the Oil Ministry will be restructured and transformed into a control body; and all oil revenues will be deposited in one national account.

The sources quoted Iraqi officials saying that the law will be referred to Parliament for ratification by the end of December; however, the legislation is likely to be issued early next year because of the holydays.(Source)AlSabah

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