Negotiators are struggling to create a new draft Iraq oil law after the earlier version came to a halt yesterday, in Washington. Iraqi parliament is in favor of two new laws, the first one is about reconstituting the state oil company and the second is the prohibition of oil and fuel smuggling.
Abdul-Hadi al-Hasani, deputy chair of the Iraqi Parliament's Oil, Gas and Natural Resources Committee, said that, "Shortly, we'll see a new draft which there is more common ground,". However the committee has also reviewed four versions of the draft oil law. He further added that the recent draft was created after a “good dialogue” between the central and Kurdistan region governments, and it will soon be approved by the Council of Ministers, so that it is received by his committee.
A new oil law has been in the works for two years, officially. According to sources the United Press International spoke to Hasani, who showed signs of optimism. However, he said that the divide over the law remains too large.
This law consists of four basic parts by legislation that intends to develop Iraq’s oil sector.
The second law is for re-establishing the Iraqi National Oil Co. that was the state run company, dissolved when Saddam Hussein strengthened his power over Iraq’s oil by his Ministry. Hasani told UPI that INOC law has been sent from the Council to his committee.
He said that, "We are going to discuss it next week," while considering it "one step in the right direction." Hassani further added that INOC will include all the state companies working in the oil and gas sector.
The legislation also included a law reconstructing the role of the Ministry of Oil and a revenue-sharing law that determines how oil sales are effectively utilzed, both these laws are awaiting further decisions from the Council of Ministers.
Husani said that, "We've been asking for it and we're waiting on it," further adding, “These two laws if they come in will really prepare good ground to be able to pass the hydrocarbons law, which everybody is waiting for."
Iraq is rich in oil and gas reserves. It has the third largest oil reserves in the world however it was the word’s 15th larget oil producer in 2006, as stated by the U.S. Energy Departmnet’s data arm, the Energy Information Administration. The oil production has greatly increased from 2 million barrels per day to 2.4 billion barrels per day. With this increasing oil production there has always been the threat of smuggling.
Hasani said that the new law has proved pivotal in targetting smugglers. Already there has been Iraqi Security Forces operation in Basra. There are still several operations under way to finish the black-market activities in Iraq’s largest oil refinery, Baiji. This law his been useful in penalizing the smugglers and improving border securities.