Iraqi officials say draft oil law to soon go to Cabinet for approval

Iraqi officials say a US-backed draft oil law will soon be returned to the Cabinet for approval after Kurds agreed to a compromise revenue-sharing measure. But they said many key sticking points remain unresolved — and not even addressed — in the watered-down legislation.The United States has pressed the government of Prime Minister Nouri  Maliki to pass the oil law and several other pieces of benchmark legislation as a means of spurring reconciliation among the country’s sectarian and ethnic groups. The law is especially important to Sunni Arabs, who populate regions of Iraq that are largely without oil resources.Kurds, who have big reserves and active fields in the north of the country, balked at previous draft legislation, believing it did not guarantee them a fair share of the revenue from fields they control or hope to control. Shiites, who control major resources in the south and who have taken political control of the government after years of oppression under Saddam Hussein’s minority Sunni rule, have been reluctant to share revenues with their former tormentors.

Passage of even a watered-down oil law would allow the Bush administration to point to some progress before the American military leadership reports to Congress on progress in the campaign to clamp off Iraqi violence.

While Sunnis feared being shut out of a share of Iraq’s oil wealth, Kurds were arguing that their share of oil revenues should be given to them directly, bypassing the central finance ministry. The bill appears to have resolved that issue with the provision that money will be deposited into a Kurdistan regional account in the central bank.

But other sticking points remained, including who should control untapped lucrative Iraqi oil fields, where estimated oil reserves could reach 115 billion barrels. The draft law suggested that most of these oil fields are to be controlled by a yet-to-be established national oil company, something the Kurds reject.

“An agreement was reached regarding the oil law, but there are some minor things in the annexes that we need to talk about with the central government,” Saleh Khalid, the Kurdish regional government spokesman and a member of the delegation involved in the negotiations, told the Associated Press on Friday. He refused to give details.

Oil ministry spokesman, Assem Jihad, said the compromise was reached after lengthy negotiations and suggested plans to form a national oil company were open to debate.

The current bill calls for two accounts to be established — one in which revenues from oil exports would be deposited, and another involving customs and taxes.

The central government in Baghdad would take from the accounts what it needs to cover the national budget while the rest would be distributed among Iraqi governates and regions, according to the draft, which was posted on the Kurdish government’s website.

The self-governing Kurdish region in northern Iraq would receive 17 per cent of net revenue, other available funds would be distributed according to population elsewhere in the country “to meet the needs of the governates not organised as regions”, the regional government said in a statement.

A government adviser said the Cabinet could vote on whether to adopt the measure as soon as Monday after which it would be sent to the Iraqi parliament for final approval.