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Iraq official calls for oil partnerships
11.9.2006
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ABU DHABI, UAE,
September 11, -- A top Iraqi official called for
partnerships with international companies to boost
his country's oil industry on Sunday, saying Iraq's
emergence as a "secure petro-democracy" could quell
rampant sectarian violence.
Deputy Prime Minister Barham Saleh, a Kurd, conceded
disputes between local officials and the central
government over who controls oil proceeds were one
of many obstacles to making improvements. But he
said he was hopeful that oil would be a "unifying
force for Iraqis rather than a resource to fight
over."
He spoke of Iraq emerging as a "secure petro-democracy"
with the strength to put an end to the violence that
threatens to tear the country apart. |
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"I don't underestimate the gravity of the situation
in Iraq," Saleh said during a U.N.- and
U.S.-sponsored Iraq donor conference in the Emirates
capital of Abu Dhabi. "We are in a very critical
situation."
Iraqi leaders are nearing agreement on a
long-awaited hydrocarbon law that could usher in
huge investments by foreign companies in Iraq's oil
sector _ and eventually rescue the embattled country
from deepening chaos, Saleh said.
The deputy prime minister said he expected the law
setting ground rules for managing Iraq's huge
petroleum reserves would be approved in parliament
by year's end.
"This will open Iraq's oil sector for investment,"
Saleh said. "We know what it takes. It takes
partnerships with international oil companies."
Foreign oil companies, with their huge investment
clout and technology, are best placed to quickly
modernize Iraq's oil sector and meet the country's
goal of doubling the current crude production of 2.5
million barrels per day by 2010, Saleh said.
But the absence of a legal framework governing
investments and ownership of the country's oil
resources has hampered foreign investment in the
sector.
Iraq's oil infrastructure has been under repeated
attacks from insurgents. The industry also suffered
during the 1990s when the country under Saddam
Hussein did not have access to state-of-the-art
technology or engineering know-how.
Big oil companies have told the U.S. government they
are willing to send crews to Iraq to explore and
pump oil _ regardless of the violence _ as long as
there are legal ground rules for their
participation, said U.S. Deputy Treasury Secretary
Robert Kimmitt.
"The oil companies have told us they need to know
what the rules of the road are," said Kimmitt,
President Bush's special envoy for the Iraq donor
talks.
Currently, Iraq's oil production is overseen by the
country's Ministry of Petroleum and two state-run
oil companies, a centralized management system left
over from the regime of Saddam Hussein that Saleh
said "has proven to be a disaster."
"Iraq needs investment. Iraq needs to send a strong
signal to the international community about
investment in oil," the deputy prime minister said.
"We need to push liberalization and open our
markets."
Saleh, from the autonomous Kurdish region in
northern Iraq, acknowledged that "differences
remain" among those negotiating a hydrocarbon law,
particularly on determining whether the resource is
controlled by regional governments or Baghdad.
Kurds in the north and some Shiite Muslims in
southern Iraq _ Iraq's two chief oil regions _ want
regional control over oil production and revenues.
But Iraq's Sunni Muslims and much of the Baghdad
government want to maintain national control over
Iraq's petroleum resources.
Iraq's proven oil reserves stand at about 115
billion barrels, the world's third largest after
Saudi Arabia and Iran.
Sunday's Abu Dhabi meeting brought together
officials from the U.S., Europe, Japan, Korea and
Iraq's Arab neighbors along with the U.N., World
Bank and International Monetary Fund to discuss The
Compact for Iraq, a five-year plan to ensure Iraq's
government has funds to survive and enact key
economic reforms.
The talks were expected to continue Sept. 18. In New
York, Iraqi Prime Minister Nouri al-Maliki and U.N.
Secretary-General Kofi Annan were to discuss
Baghdad's political reforms, while global finance
ministers discuss Baghdad's economic proposals in
Singapore on the sidelines of a World Bank and IMF
meeting.
AP
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