IRAQ OIL FIGHT

Rumor has it that the crux of the argument is whether multinational oil companies will get a piece of the action or not.

Fight Rages Over Iraq Oil Law
Ben Lando, April 27, 2007 (UPI)

WHO
60 Iraqi oil officials
click to enlarge
WHAT
There were “heated exchanges” between representatives of rival factions discussing the draft “hydrocarbon law” designed to govern, manage and distribute Iraq’s oil wealth.

WHEN
The summit meeting was during the week of April 27. May 31 is the Bush administration deadline for the law.

WHERE
The summit was in the United Arab Emirates city of Dubai.

WHY
The draft hydrocarbon law (actually a set of laws) has been in contention for 8 months. A law acceptable to a majority of Iraqi factions is widely regarded as one of the fundamental prerequisites to reconciliation in the country. Because of its importance, it was pushed through the cabinet without resolving many contentious points, after having been dodged by the framers of the 2005 constitution as too difficult to resolve. At last week’s summit, those who oppose the law were not allowed to speak but were allowed to participate in negotiations.
The main problem is thought to be how to balance the rights of the central government, and its Iraqi National Oil Company, and the rights of the Kurdistan Regional Government (KRG), specifically the percentages of oil revenues to be apportioned: How much of the present 2 million barrels/day and the reserves of 116 billion barrels will be alloted to each? Also, the KRG wants the revenues automatically distributed whereas the the central government wants payments made to the Iraqi central bank and then distributed. The central Iraq Sunni minority stands to profit little from the country’s oil.
Iraq’s oil unions oppose the amount of foreign oil company control presently proposed.


QUOTES
- Tariq Shafiq, one of three authors of the law: "I thought [the summit in Dubai for the oil officials to discuss and debate the details of the law] would help…Apparently it did not…Had there been genuine interest in having consensus…the two differing parties should have sat -- not publicly in front of the television -- to discuss with an open heart how you can reach a compromise. But this apparently was not their aim…"
- Frank A. Verrastro, Center for Strategic and International Studies, on the May 31 deasdline: “I just don't see that. It's just too much…"
- Thomas Mowle, U.S. Air Force Academy professor and Iraq expert: "If the law does not state a precise formula for that distribution, then the law is fairly meaningless…If the law includes the distribution of revenue from future oil projects, then the Kurds are likely to reject it as unconstitutional…If the law does not include such revenue, then it will accomplish little toward national reconciliation."