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Sunday, October 4, 2009

Iraq Hydrocarbons law delayed until after Jan. election.

The oil law was one of the famous benchmarks for progress ages ago but there is still no federal law. Kurdistan went ahead with its own law and has a number of foreign contracts that have not been approved by the Iraqi federal government. As the article notes there was an auction of contracts for technical support but few oil giants bid since they are waiting for better terms and an ownership stake. No doubt after the elections whichever party is in power will try to sell out to the big oil powers. However, before they do that they will have to solve the standoff between the Kurds and the rest of Iraq as to who controls what and how revenues will be shared.

Iraq delays hydrocarbons law until after election: MP

BAGHDAD (AFP) – Iraq has delayed the discussion of a stalled hydrocarbons law, seen as key to the country ramping up its oil production, until after parliamentary elections in January, a senior MP said on Saturday.
The proposed law, which would regulate the oil sector and divide responsibility between the central government in Baghdad and Iraq's provinces, has been held up for three years due to disagreements between MPs from the country's majority Shia and minority Sunni, Kurd and other communities.
"There is no agreement on the contents of the oil law ... because this government wants the management of the oil sector to be centralised," said Ali Hussein Balo, a Kurd and chairman of the parliamentary oil and gas committee.
"Due to these conflicts, we have decided to delay the oil law enactment until after the election," he told AFP.
Iraq hopes to be able to pump six million barrels per day, up from current output of around 2.5 million, within the next four to five years as new projects come online, Oil Minister Hussein al-Shahristani has said.
The country has the world's third-largest proven reserves of oil, with more than 115 billion barrels, behind only Saudi Arabia and Iran.
But investment in Iraq's ageing energy infrastructure has been hampered by delays to the hydrocarbons law.
When the government auctioned eight major energy contracts in June, only energy giants BP and China's CNPC won a bid, agreeing to receive only two dollars a barrel to operate the giant Rumaila field, which has known reserves of 17.7 billion barrels.
It was the first big upstream deal between Iraq and foreign oil majors since nationalisation of the country's oil production about four decades ago.
The second round of bidding for Iraqi oil contracts is due in the first half of December, Shahristani said last month.
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