Jul 04, 2007

Iraq: Oil Law Approved by Cabinet

The Iraqi Cabinet has approved a substantial part of the long-awaited oil law and submitted it to the Parliament for approval.

The Iraqi Cabinet has approved a substantial part of the long-awaited oil law and submitted it to the Parliament for approval.

Below are extracts from an article written by Alissa J. Rubin and published by the New York Times:

The Iraqi cabinet took a step closer today toward completing work on an oil law that is one of several pieces of legislation on which members of the United States Congress have demanded progress before they vote to authorize additional money for the war in Iraq.

The cabinet approved one part of the legislative package and sent it to the Iraqi Parliament. The proposed measure lays out the role of a new powerful federal oil and gas council, which will review all contracts and determine oil and gas sector policy.

But the cabinet has not yet approved a second measure dealing with how the oil revenue would be shared among various groups throughout the country.

Prime Minister Nuri Kamal al-Maliki described the measure approved today as “the most important legislation” to reach Parliament, and he laid out a schedule for moving ahead on the revenue-sharing law as well as other measures aimed at easing the tense relations between Iraq’s Shiite majority, who dominate the oil-rich southern part of the country, and Sunni Arabs.

Members of Parliament are expected to begin debate on the oil measure as soon as the paperwork arrives officially, which is likely in the next couple of days.

The United States Embassy here welcomed the step the Iraqi cabinet, although it falls short of the larger package of oil legislation on which Congress has demanded movement. “Iraqis have said that the issue is vitally important for their future,” said Philip Reeker, spokesman for United States Ambassador Ryan Crocker. “This is an important step in this Iraqi process.”

The oil measure approved today by the Iraqi cabinet focuses in large part on the relationship between the new council and Iraq’s regions and provinces. For instance, the regional government of Iraqi Kurdistan, which consists of three provinces, has a system already in place for letting contracts and determining oil field exploration and development. The oil measure aims to strike a balance between allowing review by the new federal oil and gas council and setting limits on the grounds on which the council can reject contracts.

Retaining some regional control over oil contracting is vitally important not only to the Kurds, but also to Iraq’s Shiites, who plan to form a region similar to Kurdistan in the south.

Iraq’s proven oil reserves are in Kurdish north and in the southern Iraq. The country’s reserves are estimated at 115 billion barrels, which are by some estimates the third largest in the world.

Although the cabinet’s approval of the oil measure is significant, only 24 of 37 cabinet members were present because the Sunni Arab ministers are boycotting cabinet meetings, as are the six ministers who represent a faction that supports the anti-American Shiite cleric Moktada al-Sadr.

Representatives of the Sunni bloc said that they were not opposed to the law, but that there were a number of aspects they wanted to discuss.

“We are astonished at the government’s rush to submit the law to Parliament,” said Salim Abdulla, a member of the Sunni bloc, known as Tawaffuk.

“We were waiting to finish with the constitutional amendments to make sure there is no contradiction between the oil law and the constitution,” he said. “We will not be an obstacle in the road of the law, but we have some comments and reservations.”

Complicating matters is that members of the Sunni bloc are also boycotting Parliament to protest an arrest warrant against the culture minister and to insist on the reinstatement of the speaker, Mahmoud Mashadani, who they had previous agreed to replace. If they are not present in the Parliament, full discussion of the law will likely be more protracted.