DPA: Iraqi Cabinet approves oil draft law; refers it to parliament (news)

Middle East News
By DPA
Feb 27, 2007, 13:35 GMT

Baghdad - Iraqi Prime Minister Nuri al-Maliki announced in a press briefing Tuesday that his cabinet would pass a newly-approved draft law on oil and natural gas to parliament for voting.

Oil Minister Hussein Shahristani, meanwhile, confirmed 'differences in views' between his ministry and officials from the Kurdish autonomous region over some clauses of the new law.

The draft law, which was approved on Monday, outlines the procedures and guidelines for oil transactions based on articles 11 and 112 of the constitution and, according to al-Maliki, 'makes Iraqis the prime owners of the wealth of oil and gas.'

The cabinet-backed law - currently proposed to parliament for review and approval - would have a 'positive impact and will certainly endorse the unity between all Iraqi elements and factions,' said al-Maliki.

He added that the 'main aim' of structuring this law was to 'realize the highest interest for the Iraqi people,' assuring that the law put 'Iraqi benefits' first.

According to Maliki, in light of the new law, Iraq's national oil company would be restructured and turned into an independent holding company. This company would then be in charge of implementing the national oil policy.

Oil revenues would be directed into a single account, and from there distributed between the different provinces according to their population counts.

The Federal Council on Oil and Gas is to represent these provinces and manage the flow of revenues.

The central government would also 'set up a new oil management structure tasked with drawing up national oil policies,' al-Maliki was quoted as saying by the Voices of Iraq news agency.

According to al-Maliki, the regional authorities would be given the right to negotiate with the bidding companies and potential investors under the guidelines established by the Oil and Gas Council.

Shahristani, however, said that the ministry would also have a role in 'regulating' the series of negotiations, 'accepting bids from qualified international companies.'

In remarks to the press, Shahristani added that 'nationality and background' of the companies would not be taken into account in making deals, 'but the ability of the company to revive the oil fields in accordance with the measures put forward by the Oil Ministry' would.

According to the minister, competition would be 'free,' and foreign investment encouraged.

During his statements, Shahristani also confirmed 'differences' between the Kurdish independent government, controlling the Kurdistan region, and the ministry.

'There is a difference of views between our Kurdish brothers in Kurdistan region (on one side) and the Oil Ministry and members of the parliament's Council of Oil and Gas (on the other) about the mechanism of negotiations over the new contracts and the existing ones,' he said.

According to reports, the Kurds would still be given the opportunity to thoroughly review the contracts, where the existing ones are incorporated in the new law.

Iraq has the third largest oil reserves worldwide. However, many of the existing oil fields have not been utilized since the 1970s.

Most oil fields are located in the south of Iraq near oil-rich cities like West al-Qurna, Majnoun, Nahran Omar, Rafideen, Helfaya, Sabba, Lahees and Bazrkan.

Other areas like eastern Baghdad, Al-Ahdab, Nasiriyah, and Artawy are also famous for their wealthy oil fields.

The current oil reserves are estimated to be equivalent to 115 billion barrels. But local experts estimate it might cost at least 30 billion dollars to renovate and revitalize the oil construction and refinery facilities.

Meanwhile, Sean McCormack, spokesman of the US State Department, sounded hopeful, when he told the press during a Monday briefing in Washington, that the proposed draft law was 'an important piece of draft legislation' and that 'oil would become a tool that would help unify Iraq and give all Iraqis a shared stake in their country's future.'

'The law would include international standards for transparency, including requirements for public disclosure of contracts and associated revenues,' he added.

dpa pa gma

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