Making his move: Hussein al-Shahristani
Kurds wary as Iraq oil law goes to vote
Iraq's Cabinet will present a much-awaited oil law to parliament next week, Oil Minister Hussain al-Shahristani said today, despite reports that officials from the Kurdish region are deeply unhappy with aspects of the emerging legislation.
An oil law is vital for Iraq to attract investments from international players to boost its oil output and shore up its economy.
"It will be ready next week to be presented to parliament," Reuters quoted Shahristani as telling reporters in the United Arab Emirates, where 60 Iraqi parliamentarians and experts met to discuss the war-torn country' law that will give its regions the right to negotiate with global players on developing oilfields.
He said that all political blocs in parliament had agreed to try to pass the law before the end of May, but the Kurdish regional government said it would not sign up to some aspects of the law.
Shahristani said he expected no major amendments in the law, though some minor changes were possible.
But Ashti Hawrami, Minister of Natural Resources in the semi-autonomous Kurdish region in northern Iraq told Reuters that annexes to the draft oil law that aim to wrest oilfields from regional governments and place them in the hands of a newly formed state-oil company were unconstitutional.
"The annexes as they are written now will not be accepted by the KRG," Hawrami said. "If I don't get the lion's share of fields (in the region) then it's a bad law. If the law dilutes regional control then it is unconstitutional.
"This law has to be in harmony with the constitution and if it doesn't then it must be thrown in the trash," he added.
Shahristani said the Kurdish government should have made its objections clear before the draft law was approved by the Cabinet in February. But he said that the appendices have not been studied in detail before the law was passed.
"They should have come to the energy council and presented their views, these appendices have been available for three months."
"Nobody is totally happy with this draft but this has been agreed to. This is the draft that had been accepted," he said.
Shahristani said the draft law would be presented in a bundle that would include the oil and gas law, a law outlining the functions of the ministry of oil, another for Iraq National Oil Company and a fourth for oil revenue management.
The future role of foreign oil companies in Iraq has caused controversy but Shahristani said such concern was unfounded.
"The oil wealth of Iraq will remain under total control of Iraq. Under no circumstances will Iraq relinquish control over its natural resources," he said.
In February Iraq's Cabinet endorsed the draft oil law, which is awaiting parliament's ratification, regulating how wealth from the country's vast oil reserves will be shared by its ethnic and sectarian groups.
The Opec member has the world's third-largest proven oil reserves and needs billions of dollars to revive its oil sector, which is crucial for rebuilding its shattered economy.
Shahristani said that model contracts would not be included in the draft law annexes. The federal council for oil and gas would develop those contracts later.
All major and minor oil companies around the world had shown interest in the future development of Iraq's oil and gas fields, he said. "We are talking about a huge potential here in terms of fields ready for development."
Shahristani said Iraq hoped to begin developing a large gas field in the western desert close to Syria in the second half of this year.