Iraq's main political factions have
hammered out an agreement on the sharing of oil and gas revenues but
other contentious issues need to be resolved before a draft
hydrocarbon law is completed, a senior Iraqi official said on
Tuesday.
Dr.Barham Salih, deputy prime minister in charge of the economy,
told reporters in Washington by video link from Baghdad that the
revenue sharing dispute had been settled during three days of
intense talks at a “retreat” last week.
“That contentious issue is out,” he said. The cabinet hopes to
present the draft law to parliament by the end of the year, he
added. |
Dr.Barham Salih, Iraq's deputy prime minister |
Oil and gas revenues would be shared out at the federal level and
redistributed to the regions according to population and “needs”, he
said. This would still provide an incentive to regional oil
companies to maximise output, he added.
Mr Salih, the most senior Kurd in the cabinet, did not elaborate on
the negotiating process but the agreement would appear to be a
compromise by the Kurdistan regional government.
Under its own regional draft oil law published this month, Kurdistan
– which has already started signing contracts with foreign companies
– would have received directly the revenues from “future fields”.
Hussain al-Shahristani, the oil minister from the main Shia
alliance, has insisted that the federal government control all of
Iraq’s resources. The formerly ruling Sunni minority fears the new
constitution, which could yet be amended, would hand control of
future oil development to the Shia and Kurdish dominated regions.
The parties also agreed last month to set up an “oil council” that
would represent all regions in Iraq, and to restructure the Iraq
National Oil Company as a holding company that would incorporate
“functional regional companies”.
But reflecting the tensions between the regions and the strains with
the federal government, Mr Salih said differences remained over who
would be responsible for taking major decisions and signing
contracts. He made no reference to the oil reserves of the disputed
province of Kirkuk, which the Kurdistan autonomous region wants to
control.
Iraq, believed to hold the world’s second biggest oil reserves,
after Saudi Arabia, is basing its federal 2007 budget on production
of 2.2 to 2.5m barrels a day and exports of 1.7 to 1.8m b/d.
Production is projected to double by 2010, Mr Salih said, while
acknowledging serious security problems.
Before the 2003 invasion, the Bush administration ignored the advice
of experts and former senior officials, assuring the US public that
Iraq’s oil wealth would pay for reconstruction. But production has
struggled to return to pre-war levels because of sabotage,
corruption and the decrepit state of the industry.
“Iraq is a devastated economic wasteland,” Mr Salih commented.
Nonetheless, Iraq planned to become economically self-sufficient
within four years, he said.
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