IRAQ OIL BREAKTHROUGH?

The emphasis on the rights of “regions” suggests the negotiators may be anticipating the formation of more "regions" before this is over. An imposed, Balkan-like division to resolve the ongoing sectarian bloodshed has been said by some, Senator Biden being one of the first and most outspoken, to be inevitable.

Iraqis Make Progress On Sharing Oil Sales
Ben Lando, June 21, 2007 (UPI)

WHO
Negotiators for the Iraq Ministry of Oil, the Iraqi National Oil Co. and Ashti Hawrami, energy minister, Kurdistan Regional Government (KRG)
the crossroads of the region (click to enlarge)

WHAT
The parties have agreed on how revenues from oil sales will be divided, a major – though not final – issue to be resolved in the formation of Iraq’s “oil law.”

WHEN
- This agreement was reached late on June 20.
- Negotiations have been going on for 10 months.
- It is not clear when Iraq’s parliament will ratify the new law.

WHERE
- Negotiations are taking place in Baghdad.
- The law is currently available on the KRG website.

WHY
- The negotiators seek to establish 4 oil-related laws which will dictate how the Iraqi Ministry of Oil and the Iraqi National Oil Co (INOC) will co-manage Iraq’s 115 barrels of reserves and how the local and federal governing structures will share the revenues. The country’s 1.6 million barrel/day oil production made up 93% of the country’s funds in 2006.
- The northern region of Kurdistan, Iraq’s only semi-autonomous region, has the 2nd largest oil reserves in the country and is largely free of violence.
- The settlement splits revenue into external and internal accounts. External accounts, such as oil and other revenues, will – after payments to the federal government for its services (like defense and foreign obligations) – will be divided between regions. Taxes and customs go to internal accounts, of which Kurdistan will be paid 17%, monthly.
- With revenue-sharing settled after a month of squabbling, the negotiators are expected to return to the contentious subject they had been working on previously, the “hydrocarbons framework law” delineating control of the oil and the contentious issue of foreign investment.
what its all about -- the oil negotiation, i mean. what did you think i meant? (click to enlarge)

QUOTES
- Hawrami, on the morning of June 21: "The revenue sharing law has been agreed, last night…"
- Hawrami: "The external will capture all the oil revenue and any other revenue -- for example donations, loans and so on…All the internal taxes and customs collected on behalf or by the federal government will go to an internal account."