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February 26, 2007
Big Oil in Iraq
by Tina Grazier
On Monday the government of Iraq found accord on a most contentious and divisive issue, the issue of oil revenue and development. Find the New York Times article HERE. The draft law, which still must be approved by Parliament, allows the central government to distribute revenues to the provinces based on population and grants regional oil companies or governments to make contracts with foreign companies for development and exploration. The agreement is a positive step for the people of Iraq as they begin to build their economy.
“At the end of the day, we all supported this thing because it’s workable for all the parties,” said Barham Salih, a deputy prime minister and the head of the committee.
Iraqi leaders say they want the 275-member Parliament to approve the law before May. The legislature is in recess but is expected to reconvene next month. American and Iraqi leaders had tried to get the law approved last year, but the effort bogged down at the drafting level. Before the cabinet vote on Monday, the main Sunni, Shiite and Kurdish political blocs agreed to work together to ensure that the law passes Parliament in an expeditious manner, Mr. Shahristani said.
A related story HERE hints at the tremendous boost to the Iraqi economy this law will bring, if they can manage to let it work:
Tariq Shafiq, a former executive in the Iraq National Oil company and one of the experts called in to draft the country's petroleum law, says Iraq could "very easily" get to 3.5 million barrels a day. He says it is "physically" capable of producing 10 million barrels a day - around the current output levels of Saudi Arabia, the pre-eminent producer today.
Mr. Shafiq, who now works for the consultants Petrolog & Associates, says that foreign involvement in Iraq's oil industry is needed for its technical knowledge, not capital - given the high price of oil, investment is pretty much self-financing. "Iraq has been left behind," he says.
Posted by Post Scripts at February 26, 2007 10:03 PM