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n° 261 • December 2006 Information and liaison bulletin • 7•<br />
very <strong>de</strong>pen<strong>de</strong>nt on the export of<br />
cru<strong>de</strong> oil, of which the country has<br />
the third largest reserves in the<br />
world. Sources close to the<br />
negotiations indicate that Prime<br />
Minister Nuri al-Maliki has<br />
“signalled his approval” of the<br />
draft, which, however, still needs<br />
the green light from the political<br />
parties and be adopted by the<br />
government. The Bill envisages the<br />
creation of a National Oil Council<br />
(directed by either the Prime<br />
Minister or the Deputy prime<br />
Minister) that would have the<br />
power of rejecting any contract<br />
proposed for a field. The regions,<br />
in the presence of a representative<br />
of the national oil organisation,<br />
would negotiate in accordance<br />
with specific parameters and<br />
investment mo<strong>de</strong>ls <strong>de</strong>ci<strong>de</strong>d by the<br />
National Council, which would be<br />
responsible for oil policy. In the<br />
event of a refusal, or if the region<br />
insisted on a contract, a<br />
commission of experts would be<br />
charged with arbitrating. The Oil<br />
Minister, the Governor of the<br />
Central Bank, a representative of<br />
each of the regions and oil,<br />
financial and economic experts<br />
would sit on the National Oil<br />
Council. A contract would only<br />
become effective if the National<br />
Council accepted it. If it rejected a<br />
project within a 60-day <strong>de</strong>adline,<br />
the contract would not be effective.<br />
The Bill also provi<strong>de</strong>s for the two<br />
national Iraqi oil companies to be<br />
transformed into a single holding<br />
company with several operating<br />
subsidiaries to manage the various<br />
stages of production. The Bill also<br />
calls for the setting of Iraqi oil<br />
policy at national level and<br />
recommends that the Ministry of<br />
Oil be restructured and<br />
transformed into a regulatory body<br />
and that all oil revenue be<br />
centralised in a single fund.<br />
On 2 December, the Kurdistan Prime<br />
Minister had ma<strong>de</strong> public the failure<br />
of discussions with the central<br />
government in Baghdad regarding<br />
an agreement on the budget and the<br />
sharing of oil revenues. “We have been<br />
unable to reach agreement on the budget,<br />
on the oil law or on the sharing of oil<br />
revenue. I hope that the situation will not<br />
become more acrimonious”, Nechirvan<br />
Barzani had said at the time, during<br />
a Press Conference in Irbil. The<br />
Kurdistan Prime Minister had met<br />
the Iraqi Prime Minister, Nuri al-<br />
Maliki, and the Oil Minister, Hussein<br />
Shahristani in Baghdad to discuss<br />
what percentage of the oil revenues,<br />
Iraq’s principal source of budgetary<br />
revenue, should be allocated to Iraqi<br />
Kurdistan. “The government proposes<br />
to allocate us 13% of these revenues but<br />
we have replied that this is not enough<br />
— we want 17%”, Mr. Barzani had<br />
explained.<br />
The Iraqi Constitution allows for<br />
each of the country’s regions<br />
receiving a share of the oil revenues.<br />
At the same time the government of<br />
the autonomous region of Kurdistan<br />
asked Baghdad to be able to continue<br />
signing oil contracts with foreign<br />
countries, from which it would retain<br />
the benefits. The two parties also<br />
failed in their efforts to reach an<br />
agreement on the application of<br />
Article 140 of the Constitution that<br />
foresees the organisation of a<br />
referendum to enable certain<br />
Kurdish regions to join Kurdistan.<br />
On another level, on 14 December,<br />
thirteen trucks loa<strong>de</strong>d with domestic<br />
fuel oil arrived at Suleimaniah from<br />
neighbouring Iran. “Trucks carrying<br />
Iranian produced fuel oil arrived<br />
following an agreement between the local<br />
authorities and the city of Kermanshah<br />
last September”, announced the<br />
governor of Suleimaniah, Zana<br />
Mohammed Saleh. “Thirteen trucks,<br />
transporting the first part of this fuel oil,<br />
arrived today”, he indicated, pointing<br />
out that each truck contained 30,000<br />
litres of fuel oil inten<strong>de</strong>d for<br />
domestic heating and cooking. Seven<br />
other trucks were also expected to<br />
arrive from Iran the next day. The<br />
agreement between the Iraqi Kurdish<br />
lea<strong>de</strong>rs and the Iranian authorities<br />
covers the importing of 300 million<br />
litres of Iranian fuel oil over a period<br />
of three months, to <strong>de</strong>al with a<br />
shortage of refined oil products in<br />
Iraqi Kurdistan. Despite having<br />
some of the world's greatest oil<br />
reserves, Iraq is suffering from a<br />
shortage of refined products, mainly<br />
due to a weakness in refinery<br />
infrastructures and to sabotage by<br />
the insurgents.<br />
TURKEY-E.U.: FREEZE OF NEGOTIATIONS WITH ANKARA,<br />
WHICH REFUSES TO NORMALISE ITS RELATIONS<br />
WITH NICOSIA<br />
O<br />
n 14 December, the heads<br />
of states and<br />
governments, in summit<br />
meeting, agreed to freeze<br />
eight of the 35 chapters of<br />
the negotiations taking place with<br />
Ankara, because of Turkey’s<br />
refusal to normalise its tra<strong>de</strong> with<br />
Cyprus as it had committed itself<br />
to do in “the Ankara protocol”. The<br />
Foreign Ministers of the E.U.<br />
countries had, on 11 December,<br />
already <strong>de</strong>ci<strong>de</strong>d to suspend<br />
discussions on eight chapters mark<br />
out the discussions with the Turks<br />
because of Ankara’s persistent<br />
refusal to open its sea and air ports<br />
to Greek Cypriot traffic. The 25<br />
first agreed to suspend the eight<br />
chapters, thus <strong>de</strong> facto slowing<br />
down Ankara’s advance towards<br />
membership of the E.U. (already