Baghdad (AsiaNews) – Iraq's cabinet yesterday endorsed a draft oil law crucial to regulating how wealth from the country's vast oil reserves will be shared by its ethnic and sectarian groups. Now the bill goes to parliament for approval, albeit two months after a self-imposed deadline was missed. Deputy Prime Minister Barham Salih expects the law to be enacted by the end of May.
“The cabinet’s endorsement . . . represents a major breakthrough for Iraq's political and economic transition,” said Salih, who is also head of the committee that drafted the law.
Oil revenues will be shared by the country’s 18 provinces according to population.
For Prime Minister Maliki, “the benefits of this wealth will form a firm pillar for the unity of Iraqis and consolidate their social structure.” He called the bill a gift to Iraqis.
The law, a key demand of the United States, was accepted after Kurdish concerns were allayed.
Agreement on the law had been held up partly because officials from Kurdistan wanted assurances over regional input in running the region’s oil fields.
With an estimated 115 billion barrels of oil in the ground Iraq has the world's third largest proven oil reserves after Saudi Arabia and Iran.
But most oil fields are located in the Shia south and the Kurdish north. With revenue sharing by population the Sunni community, which is concentrated in the oil-poor centre and west, is guaranteed a fair share of the oil money.
The draft law also lays down the rules for foreign oil companies investing in Iraq’s oil industry.
Baghdad will adhere to Production Sharing Agreements (PSA) on a 20-80 per cent basis (20 for foreign oil companies and 80 for Iraq, which will be divided by provinces).