Oil law deal 'close to collapse'

The compromise reached on a draft law governing Iraq’s oilfields, agreed to in February after months of talks among Iraqi political groups, appears to have collapsed, according to reports.

A report in the New York Times quoted two participants as saying that senior Iraqi negotiators met in Baghdad yesterday in an attempt to salvage the original compromise.

However, the meeting was held a public series of increasingly strident disagreements over the draft law broke out between Oil Minister Hussain al-Shahristani and officials of the Kurdish provincial government.

Shahristani, a senior member of the Arab Shiite coalition that controls the federal government, negotiated the compromise with leaders of the Kurdish and Arab Sunni parties, the Times said.

Since then however, the Kurds have pressed forward with a regional version of the law that Shahristani claims is illegal. Many of the Sunnis who supported the original deal have also pulled out in recent months.

One of the participants in yesterday's meeting, Deputy Prime Minister Barham Salih, who has worked for much of the past year to push for the original compromise, said some progress had been made at the meeting, but that he could not guarantee success.

“This has been like a roller coaster,” Salih, who is Kurdish, told the newspaper. “There were occasions where we seemed to be there, where we seemed to have closure, only to fail at that.

“Given the seriousness of the issue, I don’t want to create false expectations, but I can say there is serious effort to bring this to closure,” he said.

The legislation has already been presented to the Iraqi parliament, which has been unable to take any action on it for months.

Contributing to the dispute is the decision by the Kurds to begin signing contracts with oil companies before the federal law is passed. The most recent instance, announced last week on a Kurdish government website, was an exploration contract with Texas player Hunt Oil.

The Sunni Arabs who removed their support for the deal did so, in part, because of a contract the Kurdish government signed earlier with United Arab Emirates player Dana Gas to develop gas reserves.

The Kurds say their regional law is consistent with the Iraqi constitution, which grants substantial powers to the provinces to govern their own affairs. But Shahristani believes that a sort of Kurdish declaration of independence can be read into the move.

“This to us indicates very serious lack of co-operation that makes many people wonder if they are really going to be working within the framework of the federal law,” the Times quoted Shahristani as saying in an interview given before the Hunt deal was announced.

Kurdish officials dispute his claim.

“We reject what some parties say — that it is a step towards separation — because we have drafted the Kurdistan oil law depending on Article 111 of the Iraqi Constitution, which says oil and natural resources are properties of Iraqi people,” said Jamal Abdullah, a spokesman for the Kurdistan regional government.

Prime Minister Nuri Kamal al-Maliki has suggested returning to the original language agreed to in February and is trying once again to push the law through parliament, the Times said.