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Revue <strong>de</strong> Presse-Press Review-Berhevoka Çapê-Rivista Stampa-Dentro <strong>de</strong> la Prensa-Basm Ozeti<br />
New Iraqi law on oil<br />
stalled by dispute on<br />
division of powers<br />
By Edward Wong<br />
BAGHDAD: Iraqi politicians are split<br />
along ethnie and sectarian lines in nego~iati.ons<br />
to resolve the f!nal stieking<br />
pomt m a draft of the national oillaw<br />
the oil minister says. The issue involve~<br />
the division of powers between the central<br />
government and regional govemments<br />
in negotiating oil contracts.<br />
The minister, Hussain Shahristani<br />
said he believed the parties could work<br />
through their differences, which would<br />
allow them to unveil the draft soon.<br />
Th~ law would be the first step to<br />
?penmp t~e door to foreign investment<br />
ln Iraq s 011 sector by setting rules for<br />
how Iraq would handle bids on contracts.<br />
Up to 60 oil fields would be<br />
offered for <strong>de</strong>velopment in various<br />
rounds ofbidding, Shahristani said.<br />
It is. unclear whether foreign oil<br />
compames would tolerate the risks and<br />
security costs of operating in Iraq especially<br />
if the violence worsens. '<br />
Ameriean and Iraqi officiaIs also<br />
consi<strong>de</strong>r passage of the oillaw to be a<br />
crucial step in the process of national<br />
•reconciliation because the law would<br />
lay out gui<strong>de</strong>lines for the distribution of<br />
the country's oil wealth.<br />
Shahristani and other officiaIs say an<br />
Iraqi committee has reached agreement<br />
?n critieal princip les in the draft, most<br />
Importantly on a measure that would<br />
allow the central govemment to collect<br />
current and future oil revenues and redistribute<br />
them to the provinces or regions<br />
by population.<br />
Sunni Arabs, who are leading the insurgency,<br />
have been opposed to the i<strong>de</strong>a<br />
~f regional autonomy because they beheve<br />
they would not get a fair share of<br />
the country's oil wealth, whieh is concentrated<br />
in the Shiite south and Kurdish<br />
north. So putting oil revenue collection<br />
and distribution in the hands of the<br />
central govemment - and giving the<br />
money to regional governments based<br />
on population - would in theory placate<br />
the Sunni Arabs to a <strong>de</strong>gree. Sunni<br />
Arab areas in Iraq have little or no apparent<br />
oil reserves.<br />
But representatives of the main<br />
Sunni Arab,.Shiite and Kurdish political<br />
blocs are still at odds over the issue of<br />
contracts, Shahristani said in an interview<br />
this week. A ll-member committee<br />
ma<strong>de</strong> up of those representatives is reviewing<br />
and revising a draft of the oil<br />
law written by the Oil Ministry. If the<br />
committee reaches agreement, then the<br />
law would go to the cabinet and Parliament<br />
for approval.<br />
The Sunni Arabs want the process of<br />
negotiating and signing exploration<br />
and <strong>de</strong>velopment contracts to bè' put<br />
entirely in the hands of the central government,<br />
said Shahristani, a conservative<br />
Shiite. The committee's Sunni Arab<br />
representatives, who are members of a<br />
politieal bloc called the Iraqi Consensus<br />
Front, are proposing that the Oil<br />
Ministry negotiate and approve aIl contracts,<br />
Shahristani said.<br />
At the other extreme are the Kurds,<br />
who want regional governments to negotiate<br />
the contracts and have final say<br />
over them, Shahristani and other Iraqi<br />
officiaIs said. According to the Kurdish<br />
proposaI, a central body called the Fe<strong>de</strong>ral<br />
Oil and Gas Council, set up to make<br />
policy, would simply review the contracts<br />
to make sure they conform to a<br />
standard set of criteria, the officiaIs<br />
said. The Kurds recently discovered two<br />
new fields in the north after signing<br />
contracts with a Norwegian company<br />
and a Turkish company.<br />
The committee's Shiite Arab representatives,<br />
who are members of the<br />
United Iraqi Alliance, the main Shiite<br />
political bloc, fall in between the Sunni<br />
Arab and Kurdish camps. They argue<br />
that the regions should have the right to<br />
negotiate the contracts but that the contracts<br />
must be approved by a two-thirds<br />
vote of the fe<strong>de</strong>ral council, Shahristani<br />
said.<br />
If the committee members 'can resolve<br />
their differences on the contracting<br />
issue, then the final draft would be<br />
finished quiekly, Shahristani said.<br />
The top American officiaIs here have<br />
been putting increasing pressure on the<br />
Iraqis to present a draft and perhaps<br />
even approve the law by the year's end.<br />
ln its report, the Iraq Study Group<br />
said that an equitable distribution of oil<br />
, was necessary for national reconciliation<br />
and recommen<strong>de</strong>d that the central<br />
government retain full control of<br />
revenues and oil fields, much to the chagrin<br />
of the Kurds, who have enjoyed autonomy<br />
since the Ameriean military established<br />
a no-flight zone in the north<br />
in1991.<br />
Once the oillaw is approved, the fe<strong>de</strong>ral<br />
council will announce a round of<br />
bids for <strong>de</strong>velopment of discovered<br />
fields, Shahristani said. The Iraq National<br />
Oil Co., whieh was shut down by<br />
Saddam Hussein in 1987but is expected<br />
to be re-established by the law, would<br />
be able to compete with foreign companies<br />
in making bids.<br />
The Iraqi officiaIs assigned to choose<br />
the oil fields to be offered in the first<br />
round ofbids would try to come up with<br />
a geographieally equitable list, so regions<br />
would not feel ignored,<br />
lftralb:Eiltribunt<br />
December 15, 2006<br />
Shahristani said. Iraq has 80 discovered<br />
fields. Twenty are already producing<br />
oil and will be assigned to the Iraq National<br />
Oil Co., Shahristani said. Development<br />
of the others would be offered<br />
up for bids, he ad<strong>de</strong>d.<br />
Oil contracts signed with foreign<br />
companies by Saddam Hussein's government<br />
would be reviewed by the fe<strong>de</strong>ral<br />
council to see whether they should<br />
be honored or scrapped, Shahristani<br />
said. For example, a Saddam-era contract<br />
the Iraqi government had signed<br />
with Lukoil, the largest oil company in<br />
Russia, and another with a Syrian company<br />
would be revisited, he said.<br />
As for revenue distribution, the various<br />
parties have agreed that the money<br />
will be divvied out to the regions<br />
through the central government's<br />
budget process, Shah rista ni said.<br />
That means the central government<br />
would be able to divert money to finance<br />
its needs before giving the rest<br />
out to the regions. Earlier in the negotiations,<br />
the Kurds had insisted that the<br />
money, if collected by the central government,<br />
would not be funlleled into<br />
the central government's budget process,<br />
but would be split up and given out<br />
to the regions automatically.<br />
The Kurds have raised two other issues<br />
for discussion, Shahristani said.<br />
They are <strong>de</strong>manding that any contracts<br />
the Kurds have signed so far in<br />
the north should be honored. They also<br />
want assurance that the contested oilcity<br />
of Kirkuk will be inclu<strong>de</strong>d in Iraqi<br />
Kurdistan if people in the province vote<br />
for it to join the Kurdish north in a referendum<br />
scheduled for 200Z<br />
ln continuing violence, the country's<br />
wi<strong>de</strong>ning Sunni-Shiite sectarian rift<br />
was highlighted Thursday by a brazen<br />
mass kidnapping in central Baghdad.<br />
Masked gunmen in elite police uniforms<br />
abducted 20 to 30 men in the<br />
moming from a neighborhood of automobile<br />
spare parts shops, an Interior<br />
Ministry officiaI and witnesses said.<br />
The men released several Shiite hostages<br />
after beating them in a room and<br />
asking whether they were Sunni or<br />
Shiite, said a man who was freed.<br />
ln the region around Kut, the police<br />
found 17bodies by a small river, police<br />
officiaIs said. AlI the victims had been<br />
shot and killed after being tortured.<br />
ln Baghdad, a car bomb explo<strong>de</strong>d by<br />
an Iraqi Army patrol, killing two<br />
people, including one soldier, and<br />
wounding seven others, including three<br />
soldiers. Mortar rounds in western<br />
Baghdad killed a woman and woun<strong>de</strong>d<br />
twoothers.<br />
A car bomb killed two policemen<br />
who were trying to <strong>de</strong>fuse it and<br />
woun<strong>de</strong>d four civilians late Wednesday,<br />
The Associated Press quoted police officiaIs<br />
as saying. The officiaIs said explosives<br />
experts successfully <strong>de</strong>fused a<br />
second car b~mb in the same area.<br />
44