Iraq oil dealings ongoing, met by protests.

This is from the Earthtimes. The Oil law one of Bush's main benchmarks is still stalled after almost a year. Meanwhile Kurds passed their own law. The meetings described in this article apparently are not of sufficient news value to make it into mainstream media news reports. I guess that is because the Iraq war is not supposed to have anything to do with oil. Shhhh!


Iraq oil dealings ongoing, met by protests
Posted : Wed, 06 Feb 2008 00:30:22 GMT
Author : General News Editor
LONDON, Feb. 5 Negotiations between international oil companies and Iraq Oil Ministry officials appear to be progressing, despite protests at a conference in London.Iraq is in direct talks with the world's largest oil companies and is prepping for a first round of bids to develop its oil fields. Iraq's reserves, the third largest in the world, are producing about 2.3 million barrels per day, and Iraq Oil Minister Hussain al-Shahristani said the direct talks will help boost that to 2.8 million bpd by the end of the year.The Middle East Economic Survey confirms widespread reports that top officials at Shell, BP, ExxonMobil and Chevron met last week in Amman with a delegation from Baghdad, led by Natiq al-Bayati, the Oil Ministry's director general of the Petroleum Contracts & Licensing Directorate.Shahristani said contracts will be signed "within a few weeks," MEES reports. The technical service agreements will dedicate expertise, training and equipment to a handful of Iraq's oldest and largest fields. Iraq has given a Feb. 18 deadline for any interested oil firms to pre-register to be considered for more extensive contracts to develop Iraq oil fields, which Shahristani said will be an open bidding and transparent process. It's expected to take place later this year.Oil companies are interested, as evidenced by continual discussions with the Oil Ministry over the past five years and the upcoming bidding round. But security and legal questions remain."It is a country of interest to us but we are waiting for political and security stability to return before we will take anything further," a BP spokesman told The Guardian, confirming the Jordan meeting."We are in the race so to say, we would like to work in Iraq," Shell Chief Executive Officer Jeroen van der Veer said last week, the Financial Times reports, "but the petroleum law is not ratified so we don't know the conditions. We would like to know the rules of the game."MEES quoted a source from one of the Big Oil firms that there are concerns on "rates of return, how these contracts are going to be structured, will they be honored. There are concerns over Parliament's reaction in the absence of a hydrocarbon law."The draft oil law is in a major holdup, however. The central and Kurdish regional governments dispute the extent of control over Iraq's oil sector. The Kurds are so frustrated they passed a regional oil law and have signed dozens of production-sharing contracts.Iraq's oil unions and civil society organizations around the world have taken the oil law to task for allowing contracts such as the PSCs, which they fear will lead to control over Iraq's oil by oil companies.A Middle East oil conference in London Tuesday, where Iraqi, British and industry oil leaders attended, was met by protesters who fear Iraq's oil wealth will be squandered.Copyright 2008 by UPI

Kirkuk Status May Hold up Oil Law

There is now talk of the oil law being passed within a month but with issues such as these and others it seems unlikely. The bill is still not even before parliament as far as I understand it. No doubt the members want to vacation soon as well!

IRAQ'S OIL WAR
Kirkuk Status May Hold Up Oil Law
Qubad Talabani Presses Need to Settle Fate of Disputed City
By CHRISTINA DAVIDSON Posted 20 hr. 33 min. ago
Chip Somodevilla/Getty
WASHINGTON - SEPTEMBER 25: Qubad Talabani, son of Iraq President Jalal Talabani, September 25, 2006 in Washington, DC.
Secretary of Defense Robert Gates, speaking in Kyrgyzstan on Tuesday, noted that the May 31 deadline for Iraq's passage of the hydrocarbons law had not been met, also stating, "We would certainly be happier if there were faster progress on the political front."

Oil Ministry spokesman Assem Jihad told The Associated Press in a telephone interview this week, "We hope the ratification of this law will be achieved no more than one month from now. This law is considered a major national project and achievement."

But the Kurdish Regional Government's representative in Washington, Qubad Talabani, indicates that the thorny problem of the Kirkuk referendum requires resolution before the hydrocarbon law could hope to receive support from Kurdish politicians.

As Laura Rozen writes in a new profile of Qubud Talabani, the 29-year-old son of Iraqi president Jalal, in the Washington Monthly:


"Although he does not openly suggest a quid pro quo, he hints that if the referendum is delayed, the Kurds may not be inclined to support a law ensuring central government control and revenue sharing of Iraq’s oil wealth, which Washington considers critical to Iraq’s political reconciliation. At least some Iraq watchers believe that Talabani may yet get his way. 'The U.S. has found it very hard to go against stuff in the constitution,' said Patrick Clawson, a Middle East expert and deputy director of research at the Washington Institute for Near East Policy. 'I am not as convinced that this can be easily postponed.'"

The referendum on Kirkuk is supposed to take place by the end of the year. Given the current US domestic political environment, it's unlikely the Democratic Congress would stomach such a lengthy delay on passage of the hydrocarbons law without re-doubling efforts to withdraw American troops.

Kurds to attempt to negotiate with Iraqi govt. re oil law impasse.

I wonder if this sudden movement is a result of Cheney's meeting with Maliki and attempts to meet one of the US benchmarks, passage of an oil law?

Kurdish Officials To Meet Govt In Baghdad Over Oil
Senior Iraqi Kurdish officials will travel to Baghdad next week hoping to end an impasse with the central government.

Reuters
Senior Iraqi Kurdish officials will travel to Baghdad next week hoping to end an impasse with the central government over a draft oil law to share revenues from the world's third-largest oil reserves.

Shi'ite Prime Minister Nuri al-Maliki, under pressure to push through key legislation Washington says is vital to healing sectarian divisions among Iraq's sects and ethnic groups, told an international economic conference on Iraq last week that the bill had been submitted to parliament for approval.

Oil Minister Hussain al-Shahristani, also speaking ahead of the meeting in Egypt in which industrialised powers pressed reforms in Iraq in exchange for aid, told reporters in Saudi Arabia last week that Kurds were "very happy" with the draft law and that all the groups had agreed to pass it by the end of May.

But an oil industry source told Reuters on Thursday the bill was in a state body charged with drafting legislation, and that Kurds still had misgivings over annexes they say would wrest oilfields from regions and place them under a new state-oil firm.

Iraq's Kurdish Prime Minister Nejruvan Barzani said he will lead a high-level delegation of Kurdish officials to discuss the annexes with the central government next week.

"Next week, new negotiations will start over the appendixes to the oil law and the revenue distribution law. I will participate in a large part of these negotiations," Barzani told reporters in the northern city of Arbil late on Wednesday.

"The Kurds had a big role in writing the draft of the suggested oil law. I am optimistic in resolving the disputes."

An oil law is vital to securing foreign investment to boost Iraq's oil output and rebuild its war-ravaged economy.

But divisive issues not formalised when cabinet passed the law in February, such as how revenues would be shared and who would gain control of discovered but undeveloped oilfields, has delayed its approval.

Barzani has insisted that Kurds want to include a separate law on oil revenue management that would set up a Kurdish fund. The central government has said it wants revenues put in a central account and distributed according to Iraq's population.

Most of Iraq's proven oil reserves are in the Shi'ite south and in the Kurdish north.

A fair distribution of the oil wealth is vital for national reconciliation because Sunni Arabs, who live in areas with no oil in central and western Iraq, fear a bad deal would cut them off from any windfall. Sunni Arabs are the backbone of the insurgency.

Iraq's Deputy Prime minister Barham Salih, the chief architect of the draft oil law, told Reuters in an interview earlier this month he was confident a draft oil law would be approved in parliament after officials from the central government and Kurdistan meet to iron out differences.

Part author of Iraq Oil Law now a critic

Several articles have now claimed the oil law is before parliament. However there is obviously still a great deal of opposition to the present draft and no sign that those issues will be resolved soon. The recent conference in Dubai did not do anything to solve outstanding issues it seems. If anything it exacerbated them. Most of the discussion seems to be in specialised sources and not the mainstream media.

: Iraq oil law author now a critic

Published: May 2, 2007 at 4:46 PM By BEN LANDO
UPI Energy Correspondent
WASHINGTON, May 2 (UPI) -- A critic of Iraq's draft oil law with perhaps the biggest shadow -- one of its original authors -- says the version penned by oil experts has been compromised by politics and he no longer wants it approved.
"I think really the majority of the oil technocrats are against it," Tariq Shafiq, director of the oil consultant firm Petrolog & Associates and one of three authors of Iraq's draft hydrocarbons law, told United Press International in a telephone interview from his home in Amman, Jordan.

Shafiq said the drafters' goal was to create a law that managed Iraq's oil reserves -- estimated at between 115 billion and 116 billion barrels -- in a federal planning process that included regions and governorates in decision-making roles.

"It required central united plans and policies for oil development that take into consideration the whole country and not any part of it," Shafiq said. And, he says, though it took him, Farouk al-Qassem and Thamir Ghadban three months to write the law last summer, the compromises reached in the subsequent eight months of negotiations between the central government and the Kurdistan Regional Government have turned the proposal into one he can no longer sign off on.

"These political accommodations have fragmented and weakened the central objective of the first petroleum draft: that of a unified and balanced oil resource management policy run from the center by the federal authorities, not only in cooperation with ... but also, in many instances, through the participation of the regions and governorates," Shafiq wrote last week in an article published by the Middle East Economic Survey.

(Qassem also opposes the law now. Ghadban, a respected oil expert, former oil minister and current adviser to the prime minister on oil issues, represented the central government in negotiations with Ashti Hawrami, the KRG's oil minister.)

The two sides can't come to terms on which oil fields are given to the central government and which are under the regions' purview. This will need to be resolved by an official interpretation of the constitution, passed in 2005, and a possible amendment to the document. And though there is agreement that oil revenues will be kicked to the federal government to be redistributed, there's no deal on how much the KRG receives.

Iraqi President Saddam Hussein, toppled by U.S. forces in March 2003 and executed in December 2006 for a massacre, deprived the now semiautonomous and relatively peaceful northern region of investment and oil funds. Now the KRG wants an automatic mechanism for the redistribution of the wealth -- out of the hands of the Central Bank or Finance Ministry, which the Kurds fear will withhold the money for political reasons.

The hydrocarbons framework -- a portion of the legislative regime needed to govern Iraq's oil -- was approved by negotiators and Iraq's Cabinet in February. The Bush administration immediately hailed it as a major step forward; passing an oil law is one of U.S. President Bush's benchmarks for success in Iraq. Iraq's Parliament needs to approve the document for it to become law, but the remaining pieces of the legislation need to be finalized first.

Now, however, the process is falling apart. Iraqi Oil Minister Hussein al-Shahristani told reporters at a conference two weeks ago in Dubai, the United Arab Emirates, that Parliament would take it up last week. It didn't.

At the same meeting, Hawrami said the list of control over oil fields is unacceptable to the Kurds and said their parliamentarians will vote against the law.

The oil unions and Sunni and Shiite parliamentarians and politicians have come out against the law. Shafiq, whose brother was killed recently in the sectarian violence in Iraq, says now is the time to put the law on hold and deal with resolving key issues first. Shafiq and 60 other experts wrote a letter to the government urging officials to do just that.

"While all revenue is earmarked to the whole nation, this may not necessarily be the maximum revenue as long as the management of the resources is not optimal," he wrote in the MEES article, which was a call for central planning for Iraq's oil sector. "An optimal management plan can only be based on unbiased allocation after assessing the whole resource and infrastructural base of the country."

He says the regions don't have the "necessary institutions" or "required expertise" to develop and operate their oil fields without the help of the central government -- via the reconstituted Iraq National Oil Co. (Shafiq was founding executive director of INOC in 1964) -- or international oil companies. He fears, however, the regions will then be too reliant on foreign companies.

In order to satisfy concerns of both the central and regional governments, the original draft gave overall planning responsibilities to the federal government via a federal oil and gas council and the re-established INOC. However, regional representatives would still be part of the council and sit on INOC's board.

Criticism from Shafiq is a blow, said Muhammad-Ali Zainy, senior energy economist and analyst at the London-based Center for Global Energy Studies.

"He's good; he's well-respected," said Zainy, an Iraqi-born oil expert who defected in 1982. "He's well-qualified and he has plenty of experience -- over 40 years, more than that. He's one of the pioneers."

At the meeting in Dubai last month, Shafiq said critics were kept from airing complaints publicly. He did, however, have a chance to exchange views with Hawrami, the KRG's oil negotiator.

"I was pleasantly surprised, when we sat and discussed many points," Shafiq recounts, "he tells me, 'Had we sat, you and I, a long time ago, many of these problems would not have existed.'"

--

(e-mail: energy@upi.com)

Kurdish Regional Govt. objects to Oil Law

There is considerable resistance to the oil law not only from the Kurds but also from oil workers, unions, and as another article I have posted shows, the Communist Party of Iraq. There is little publicity about the discussions in the western press. There only seem to be leaked texts of the law available even though this is a crucial law for the Iraqis.


Iraq's Kurds object to oil law
by Reuters on Wednesday, 18 April 2007

Iraq's Kurdistan Regional Government (KRG) will not sign up to details in the emerging oil law that would centralise control of most of the country's reserves, the region's top energy official said on Wednesday.

Disagreement could delay the country's parliament from passing the law, seen as key to attracting billions of dollars in foreign investment needed to overhaul the industry and boost oil output.

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 are unconstitutional, Ashti Hawrami, minister of natural resources in the semi-autonomous region in northern Iraq told Reuters.





"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."

"It is the dream of some in Iraq to go back to centrally controlling the oil as before and that will never happen."

The annexes to the law have yet to be debated, casting doubt on Iraqi Oil Minister Hussain al-Shahristani's assertion earlier in April that the law could be passed in two months.

"It is better to give it some time and get it right, rather than rush it and get stuck with it," Hawrami said.

Despite the differences, Hawrami said the KRG was committed to the law and wanted it to succeed, but in a form acceptable to all regions.

"I will fight to the last minute for it, because it is in our interest to make it work and the only way for Iraq to stay united."

He spoke to Reuters ahead of a meeting of around 60 Iraqi parliamentarians and oil experts in Dubai to discuss the law on Wednesday.

Iraq's cabinet approved the draft law in February, which is awaiting parliament's ratification. The draft did not formalise divisive issues such as how oil revenues would be shared and who would gain control of discovered but undeveloped oilfields - the federal or regional - governments. Those details were to be clarified in the annexes.

Shahristani said in January that the national oil company would be given control of the country's most prized oilfields, and fields on their periphery.

Hawrami said on Wednesday draft annexes would give the state oil company control of an unacceptably high 80% of Iraq's oil reserves. The country holds the world's third largest reserves.

Hawrami said an Iraq National Oil Company should maintain control of producing fields, but did not have the expertise or capital for discovered but undeveloped fields.

"Some of those fields were discovered 30 years ago," he said.

"If you haven't done anything with them in 30 years, what makes you think you can suddenly be well organised and do a good job?"

Hawrami said he favoured production sharing agreements with international oil companies to develop discovered fields.

There were also still disagreements about the mechanism for distributing oil revenue, Hawrami said.

The KRG wants a fund set up outside of Iraq to distribute the revenue, and does not want to rely on the central government for payment.

The central government has on several occasions delayed payment of the KRG's share of the federal budget, he said. It owes the KRG around $1 billion in late payments already this year, he added. The KRG does not want to see a similar situation develop with future oil revenue, he said.

The KRG is writing its own oil law in line with Iraq's constitution, he said.

The region intends to contract out all of the 38 oil and gas exploration blocks it has drawn up by the end of this year, he said. That forms part of the region's plan to boost oil exports to around a million barrels per day (bpd) as soon as possible.

So far, around 10 blocks have been contracted out to oil and gas firms under agreements already signed. Hawrami has previously said that existing agreements total around 200,000 bpd of future production and that the region aims to boost output by another 800,000 bpd in the next five years.