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PETROL POLITICS
Qubad Talabani on Iraq's Oil Law
Council of Ministers Substantially Altered Draft, Negotiators Discuss Revision
By BEN LANDO 07/13/2007 09:29 AM ET
Taq Taq, IRAQ: A general view shows a drilling platform at an oil well digging site near the village of Taq Taq, in the autonomous Iraqi region of Kurdistan, 23 June 2007.
Ali al-Saadi/AFP/Getty
Taq Taq, IRAQ: A general view shows a drilling platform at an oil well digging site near the village of Taq Taq, in the autonomous Iraqi region of Kurdistan, 23 June 2007.

WASHINGTON, DC (UPI) -- Although Iraqi Kurds are now opposing changes made to a draft oil law, their top envoy to Washington says there's time -- though not without end -- to reach a compromise on key issues.

"I doubt we'll veto the law based on a few scattered changes," Qubad Talabani, son of Iraqi President Jalal Talabani and the Kurdistan Regional government's representative to the United States, told United Press International at his Washington office. "However, we still need to ensure we stick within the guidelines outlined in the constitution."

KRG and federal government delegates have been negotiating since last summer the law governing the world's third-largest oil reserves. At issue is how much control the federal government has over exploration, development and production of oil versus the regions or governorates.

Last week the Council of Ministers approved a draft of the law -- which had already been opposed by oil technocrats, unions and Sunni parties seeking a stronger central government arm -- and sent it to Parliament. Sunni and some Shiite parties opposed to Prime Minister Nouri al-Maliki's government are alternately threatening to boycott Parliament or return to oppose the law.

"I think too many Iraqi officials are commenting on the hydrocarbons law without fully reading it," Talabani said. The KRG was almost completely in agreement with the law before the approval of the council, which further changed it.

"Some substantive changes were made," Talabani said. "Some language that we had put in has been taken out. Now whether it has been taken out with malicious intent or whether it has been taken out because it was deemed not legal language is what we're trying to determine."

A team from Baghdad has been in Kurdistan to discuss the issues, which Talabani said would be ironed out in talks, not bluster. "In a friendly atmosphere, not raising a stink about it," he said.

Kurds take a somewhat hard line in talks about the future of Iraq to ensure there's no repeat of their pre-2003 treatment, where investment was kept from them and the brutality of Saddam Hussein was in full force. They've been semi-autonomous since 1992, however, and are keen on retaining that, if not strengthening it.

"It's concerns that we have that are a result of history. And neglect. Mismanagement throughout its history. It's made us as Kurds very insecure that future governments in Iraq will mismanage the resources," Talabani said.

He points to the Iraqi Constitution, approved in 2005, that requires the federal government to work "with" regions and governorates to develop the oil sector. Exactly how that takes shape is at the crux of the federalism dispute.

Talabani said the oil law should be the instrument to further flesh out the constitutional vagueness.

"We want to have a say in how the south is developed, how the west is developed, how Baghdad is developed," he said. "If we are partners, if we are Iraqis, then we want to be full partners. It's a fair request. It shows our willingness to be part of this federal Iraq." And vice versa with other factions in the country, he said.

Iraq has 115 billion barrels of proven oil reserves, nearly all located in the Shiite-controlled south or Kurdish north (though a large oil field near the KRG zone is considered a disputed territory). Iraq needs investment in its sector to fix and modernize its current infrastructure so it can increase production. Last month Iraq averaged less than 2 million barrels per day, according to the global energy information firm Platts, a drop from the month prior and far below the 2.6 million bpd before the war.

Opponents of the oil law want to limit the access of foreign oil companies to Iraq's nationalized sector, though the Kurds are pulling for more of a free-market model.

The oil law is to be one of four laws in a general hydrocarbons regime package. Iraq sent an average of 1.6 million bpd to market last year, bringing in enough money to fund 93 percent of its federal budget. A revenue-sharing law that will determine how proceeds from Iraq's oil sales will be redistributed throughout the country -- and how much -- was agreed on by KRG and federal government negotiators and sent to the Council of Ministers, which has yet to take it up.

"The fact that we could overcome our differences and come to an agreement on that means that the prognoses for the other three components are good," Talabani said. Laws governing the Iraqi National Oil Co. and the Ministry of Oil round out the hydrocarbons package.

Meanwhile, the KRG makes progress on its own. It's relatively less violent than the rest of the country. Daily flights in and out of the capital, Irbil, have increased and Talabani said he saw an "entrepreneurial spirit" during his recent visit. The KRG has signed five deals with foreign oil companies, which the Iraq oil minister said will be brought in line with the eventual federal oil law. The KRG is moving forward with its own regional oil law, also aligned with the federal law.

That's if the federal legislation is approved.

"It's difficult to say how long we will wait," Talabani said. "We know that this is part of a much larger picture and we don't want to do something that could upset the larger picture.

"We've been patient up until now. I think we'll continue to be patient. We'll continue to be pragmatic. We can't have an all-or-nothing policy and we've seen this throughout the negotiations, there are things that are going to upset us as Kurds, there are things that are going to upset our Arab brothers," he said.

Ben Lando is UPI energy correspondent. This article re-printed by permission. © Copyright 2007 United Press International, Inc. All Rights Reserved.

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