Monday, November 12, 2007

Iraq's Leaders Still Can't Agree On New Oil Law

Reuters reports:

Iraq's political leaders are in intensive talks to resolve lingering disputes over a draft law that will decide control of the world's third-largest oil reserves, Iraqi Prime Minister Nuri al-Maliki said on Sunday.

"Everyone agrees that this law should be passed. There is positive progress and understanding between the parties. I believe talks in the coming days will be intensive to resolve the disputes," he told reporters in Baghdad.

The oil law is seen as vital to securing foreign investment to boost Iraq's oil output and rebuild its shattered economy. Most of Iraq's proven oil reserves are in the Shi'ite south and in the Kurdish north.

The cabinet agreed on a draft in February and sent it to parliament for approval, despite disagreement over the rights of regions to negotiate contracts with foreign oil companies and whether the federal or regional governments would control the oil fields.

Maliki said the bill, which will provide a legal framework for foreign firms to do business in Iraq, had since been sent back to cabinet for more talks to iron out the disputes.

The prime minister said there was still disagreement over the exploration of undeveloped fields and production-sharing agreements, as well as contracts that had already been signed with some foreign companies.

Iraq's Kurdish region said last week it had signed seven new oil and gas contracts with international firms.

The Kurds say the draft law's annexes are unconstitutional, objecting to a proposal that would wrest oilfields from regions and place them under the control of a new state oil company.

Maliki said some parties in the negotiations wanted the annexes separated from the draft law to ease its passage through parliament.

"These disputes, some of them are based on the interests of the whole country and others are based on specific provinces," Maliki said, without referring to Kurdistan by name.