Iraq Officials Begin Drafting Oil Legislation

Iraq's crude oil resources are vital to its future. But there is deep division over just how the country will develop its tapped, and untapped, oil wells. This week, Iraqi officials and oil industry professionals met in Dubai to hammer out legislation that will guide the country's oil future.

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While politicians and generals go through their various plans, Iraq is trying to figure out how to manage its vast oil wells. Top officials met in the safety of nearby Dubai.

NPR's Ivan Watson was there.

IVAN WATSON: Iraqi officials gathered in the safety of this opulent Arab sheikdom yesterday to promote and debate a draft of the oil law with Iraqi experts in the industry. Many of these Iraqi professionals live abroad, and refuse to travel to Iraq - with good reason. On the day of this meeting, car bombs killed some 170 people in Baghdad.

Unidentified Man: (Foreign language spoken)

WATSON: In opening remarks, Iraqi officials described hundreds of untapped Iraqi oil wells as the last great hope for rebuilding their war-torn country.

(Soundbite of applause)

WATSON: The oil law is supposed to regulate who will develop these lucrative oil fields and how the revenues will be shared. Washington applauded last February when Sunni and Shiite Arabs and Kurds in the Iraqi cabinet unanimously approved a draft of the oil law. Hussain al-Shahristani is Iraq's minister of oil.

Mr. HUSSAIN AL-SHAHRISTANI (Minister of Oil, Iraq): Well, nobody is totally happy with this draft, including the Minister Of Oil. But this has been a compromise that everybody has agreed to. And whether they are happy or not, this is the draft that has been accepted.

WATSON: Shahristani hopes the law will soon be ratified by the Iraqi parliament. He also predicts that work could begin on new Iraqi oil fields by the second half of this year. But at this week's meeting, it became clear there are still deep divisions between Arabs and Kurds over the legislation. Ali Baban, the Sunni Arab minister of planning, said he would push for changes in the draft.

Mr. ALI BABAN (Iraqi Minister of Planning): I'm not happy for all item of this law. I look for more centralization in Iraq. And I think without this centralization, we cannot give (unintelligible).

WATSON: Those are fighting words for the Kurds of semi-autonomous northern Iraq, who want to have the freedom to negotiate their own oil deals and to control their share of the oil revenues.

Mr. ASHTI HAWRAMI (Minister, Kurdish Natural Resources): We can manage all our affairs. We don't want federal government to tell us how to spend our share of the money.

WATSON: Ashti Hawrami is the minister of oil for the regional government of Iraqi Kurdistan. He objected to a new plan that would give Baghdad control of oil fields in Kurdish-controlled territory. And he threatened to withdraw Kurdish support for the law.

Mr. HAWRAMI: We will proceed in Kurdistan and do our own agreements. We always said that, by the way. This is not new.

WATSON: The Kurds have secured deals with five small foreign oil companies, which have already begun drilling for oil on Kurdish territory. Tariq Shafiq is a former Iraqi oil company executive and one of the authors of the draft law.

Mr. TARIQ SHAFIQ (Former Executive Director, Iraq National Oil Company): Kurdistan are in a rush to bring companies in Kurdistan to enhance their economic situation. I don't blame them for this if they were a separate state, but they are not.

WATSON: Shafiq's brother was murdered in Baghdad two weeks ago. Unlike his colleagues in the Iraqi government, he says there's no reason to push through a law to govern future contracts with foreign oil companies while the country is at war.

Mr. SHAFIQ: Would you want to go to Baghdad tomorrow? Who is the oil company that really want to go to Baghdad?

Ivan Watson, NPR News, Dubai.

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