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Kurds support new oil law, a key benchmark
25.2.2007 |
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Agreement to share oil wealth could open economy to
new investments
February 25, 2007
SULAIMANIYAH, Kurdistan region (Iraq),
February 24, -- Kurdish authorities have agreed to
back a draft law to manage and share Iraq's vast oil
wealth, removing the last major obstacle to
approving the measure and meeting a key U.S.
benchmark in Iraq, a top Kurdish official said
Saturday.
Approval of a new oil law could help open the way
for international oil companies to invest billions
to upgrade Iraq's decrepit wells and pipelines and
exploit the country's reserves, among the world's
largest.
The bill also provides a formula for distributing
revenues among all major ethnic and religious
groups, easing Sunni fears of being cut out of a
future bonanza because their central and western
homelands lack extensive reserves.
Massoud Barzani, president of the self-governing
Kurdish administration in Kurdistan region in the
north, announced the agreement at a joint press
conference with U.S. Ambassador Zalmay Khalilzad and
President Jalal Talabani. Barzani said he and
Talabani had discussed the latest draft law by
telephone with Prime Minister Nouri al-Maliki.
"We reached a final agreement," Barzani said. "We
accept the draft."
There was no comment on the announcement from
Khalilzad or Talabani, and Barzani did not
elaborate. It was unclear whether new concessions
had to be made to win his approval.
Al-Maliki's government had promised to enact a new
oil law by the end of 2006 but missed the deadline
due to objections from the Kurds, who wanted a
greater role in awarding contracts and administering
the revenues.
The Cabinet discussed the draft Thursday but failed
to agree. Once the Cabinet signs off, the measure
goes to parliament for final approval once the
legislators return from a recess early next month.
The Bush administration, facing growing pressure to
end the Iraq conflict, has been urging the Iraqis to
finish the new oil law.
A new law is needed, most outside experts believe,
to encourage international companies to pour
billions into Iraq to repair pipelines, upgrade
wells, develop new fields and begin to exploit the
country's vast petroleum reserves, estimated at
about 115 billion barrels.
According to Iraqis familiar with the deliberations,
the draft law would offer international oil
companies several methods to invest, including
production-sharing agreements. Those would give U.S.
and other international companies a substantial
share of the oil revenues to recover their initial
investments and then allow them big tax breaks.
That angers some Iraqis, who believe foreigners will
get too much control of the nation's wealth.
But the biggest battle is over who gets the most say
in awarding contracts and managing the revenues. The
Kurds, who have run their own mini-state in the
north since 1991, want regional administrations to
have a bigger role.
Most of the country's proven oil reserves lie in the
Kurdish north or the Shiite south, which also wants
to establish a self-ruled region. That has led the
Sunnis to demand more power for the central
government, to assure them a share of the wealth.
To win Kurdish approval, the current draft gives a
major role to the regional administrations in
awarding contracts but allows a committee under the
prime minister to review them.
To satisfy the Sunnis, oil revenues would be
distributed to the 18 provinces based on their
populations - not on whether they have oil. It's
unclear whether Sunni Arabs would accept a
population-based formula since they have
consistently challenged figures showing them as a
minority.
While the Kurds want more control of revenue
generated from their fields, others think the new
proposals give the regions too much control.
If implemented, "The balance of power in the
management of Iraq's oil and gas resources would
have shifted alarmingly from the center to the
regions," Tariq Shafiq, a former oil official who
helped draft the first version, said in Amman,
Jordan, this month.
AP
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