Iraq oil experts label oil law unconstitutional

[Stillw8n]

Iraq oil experts label oil law unconstitutional

09/10/2011 11:44
Baghdad, Oct. 9 (AKnews) – Several high-ranking Iraqi oil experts got involved in the current dispute over the distribution of the country’s oil revenues and criticized what they called the “marginalization of the provinces”.

The recent oil law and attempts by the federal government to be the sole distributor of the oil wealth were against the constitution, the experts said.

“The Iraqi Constitution says, that the federal government and the provinces and governorates where oil is produced have to work together to produce and export the oil,” Ali Kah Gih, director of the Iraqi Market Center, said. “If the provinces may not participate, this is against the law.”

Article 112 of the Iraqi Constitution says indeed, that “the federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas.” However, article 112 is placed right between the articles 109 to 110 which define the fields of exclusive federal authority, and article 114 which defines the fields of shared authority. Thus, article 112, with its vague wording, is quoted by both sides, federal and regional authorities, to strengthen their individual position.

Under the Erbil Agreement, by which the political leaders agreed to form a national-partnership government in 2010, an agreement should be reached over a new oil law. A draft, that was passed this year, sparked tensions between the federal and the Kurdish government.

The Kurds accused the federal government of passing the draft law without taking the Kurdish opinion into consideration. On the other hand, Baghdad criticized Erbil for signing contracts with international oil companies without the consent of the federal Oil Ministry.

Karim al-Mawla, an economic analyst and member of the Iraqi Economic Forum, believes Iraq should never have abandoned the oil law that was made in 2007.

“The Iraqi government ignored the oil and gas draft law of 2007 which had been the result of a consensus,” Mawla said. “The recent draft law now was against the constitution.”

Farhad Amin al-Atrushi, member of the parliamentary Energy Commission, denied the allegations that the federal government would marginalize the provinces and regions.

“There is an agreement between the political blocs to expand the role of the regions and the provinces in the formulation of the country’s oil policy,” Atrushi said. “The new oil and gas law will make sure that the oil revenues are managed through collective government work.

The parliamentary Oil Commission is currently studying three drafts for a new oil law. According to committee members, the committee agreed to 90% of the drafts, except to those articles that deals with the distribution of the oil wealth.

A delegation of Kurdish politicians that visited Baghdad for negotiation over the oil law and other outstanding issues last week, said that, although no decision were made, the negotiations were “positive”.

Iraq has has the world’s fourth-largest oil reserves with an estimated amount of 137 billion barrels of crude oil. In August, exports were at an average of 2.19 million barrels a day, with Iraq’s oil industry being at or near capacity.

According to previous announcements by the Iraqi government dating back to 2010, the oil production is supposed to rise up to 12 million bopd in 2016.

Currently, Iraq finances 95% of its annual budget through oil revenues.

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