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Iraqi & Kurdistani leaders still wrangling
over oil law
22.11.2006
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Baghdad, November
22,-- Senior Iraqi officials will resume
negotiations to try to resolve a dispute over a bill
intended to encourage foreign investment in the oil
and gas industry, the government's economy chief
said.
Control of the world's third largest oil reserves
divides Iraq's three main communities, the Arab
Sunni and Shi'ite Muslims and ethnic Kurds. Most of
the oil lies in the mainly Shi'ite south and close
to Kurdistan in the north.
The issue of who has the power to sign contracts --
the provinces or the national government -- is
critical because a major regional say will devolve
more power over resources to Iraq's majority
Shi'ites and the Kurds than the national government.
Minority Sunni Arabs, the dominant group under
Saddam Hussein, fear regional devolution will leave
them with nothing.
'The Oil Committee is going to resume its meetings
on Thursday to discuss the Oil Law,' Deputy Prime
Minister Barham Salih said.
'Signing contracts remains a matter of dispute,' he
added.
Salih, a Kurd, said earlier this month the
legislation should be enacted by the end of the
year.
He chairs a government committee on oil and energy
policy, composed of key ministers, which had
struggled to overcome deep differences on the
components of a new law to replace provisions dating
from the rule of Saddam Hussein.
Oil Minister Hussain Al Shahristani has said his
office must have ultimate control over Iraq's oil
reserves and has criticised deals already signed
with Norwegian and Turkish firms by the autonomous
Kurdistan regional government in Erbil.
Kurdish Prime Minister Nechirvan Barzani has hit
back, defending his constitutional rights in the
sector. Some of Shahristani's fellow Shi'ites also
oppose his desire to centralise control and would
like to see more power for regions.
Ashti Hawramani, the Kurdistan region's natural
resources minister, said: 'I'm optimistic about
reaching an understanding between the two sides ...
This understanding will be on the basis of the
permanent Iraqi constitution.'
Years of UN sanctions, mismanagement under Saddam
and now daily violence since the March 2003 US-led
invasion have severely degraded Iraq's oil sector
and it now needs billions of dollars of capital
investment.
Sabotage attacks have made Iraq's northern export
pipeline unusable for most of the time since the
invasion so Baghdad relies mostly on its main
southern Basra oil terminal for exports.
Oil ministry spokesman Asim Jihad said exports now
stand at 1.7 million barrels per day (bpd). Salih
said this month Iraq aims to double exports by 2010
and raise output to 6 million bpd from 2.3 million
bpd.
Major oil companies are waiting for the oil
investment law to set out the regulatory backdrop
before they commit, but analysts say, even then,
violence and insecurity are likely to delay
investment, perhaps for years to come.
Jihad said formation of an oil company for the
southern province of Maysan, which includes oil
fields around Amara, has already been approved by
the cabinet, and the provinces of Wasit and Kirkuk
would also get their own companies, though they
would be 'fully supervised by the oil ministry'.
Shahristani told state television Iraqiya this week
that any province that produced at least 100,000 to
150,000 bpd would be able to have its own oil
company.
Another Iraqi official said the new petroleum law
would call for re-establishing the Iraq National Oil
Company (INOC) as a holding company with affiliates
that could be defined geographically, technically or
along both lines.
Their role would be to operate the oilfields.
Jihad said Iraq planned to open the bidding for
contracts to build three major oil refineries at the
beginning of next year.
He said the refineries in question were Al Nahrain,
near the southern city of Kerbala, with a capacity
of 140,000 bpd, Nassiriya in the south with a
capacity of 300,000 bpd and Goya in the Kurdistan
region province of Sulaimaniyah with a capacity of
70,000 bpd.
Reuters | Agencie
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