Iraq Parliament Panel Wants Hydrocarbon Law Ahead Of New Deals

[LA2009]

http://online.wsj.com/article/BT-CO-20110704-704026.html

By Hassan Hafidh

Of DOW JONES NEWSWIRES

The Iraq parliament's oil and energy committee has called for lawmakers to ban the Baghdad central government, as well as regional and provincial governments, from signing any new oil and gas contracts until a long-delayed hydrocarbon law is enacted.

The committee officially submitted a statement to the Parliament, a copy of which was emailed to Dow Jones Newswires Monday, urging lawmakers to pass a decision prohibiting any new oil and gas deals until the law is passed.

The move is seen as away of helping to end the impasse in parliament approving the oil and gas law that has been stalled because some blocs such as the Kurds oppose parts of its provisions and they are calling for them to be amended. The committee wants to restart the debate on the law with the aim of producing a version that will be acceptable by all parties, Kurds, Sunnis and Shiites.

According to the document, the committee has asked lawmakers to pass the following decision: "The council of deputies (parliament) hereby has decided to postpone the process of initialing any new contracts regarding production of crude oil and natural gas and hasten the legislation of oil and gas law."

The Iraqi constitution of 2005 calls for the enacting of an oil and gas law. Political leaders agreed to a draft law in 2007, but it never got beyond being debated as lawmakers have yet to agree on it.

Over the last two years, the Iraq central government has signed some 13 oil and gas deals with international companies without approval from the Iraqi parliament.

The government is arguing that these deals are based on old laws enacted during the former Iraqi leader Saddam Hussein's regime that don't need parliament's approval.

The oil ministry has launched a new exploration round and it is planning to award new contracts in January. A ministry official, who asked not to be named, said that the ministry is going ahead with its plan to hold the new bidding round to award 12 exploration blocks.

The parliamentary committee hinted that even the service contracts that Baghdad had signed with oil majors over the past two years were illegal because they hadn't been approved by parliament. "The Ministry of Oil signed several oil and gas investment contracts for areas all over Iraq ???without referring to the legislative authority," the committee's statement said.

Meantime the office of deputy prime minister for energy affairs Hussein al-Shahristani issued a statement saying that the energy committee at the cabinet held a meeting in which it discussed an amended version of the oil and gas law submitted by the oil ministry. The committee, which is chaired by Shahristani, decided to study the draft law and will comment on it in its next meeting, it said.

Iraq's central government approved in 2007 a version of the draft law but faced stiff opposition from the Kurdistan Regional Government in northern Iraq, which felt it was getting a raw deal.

The hydrocarbon law is important to settle a dispute between Baghdad and the regional government in Kurdistan. Baghdad doesn't recognize scores of deals signed by the KRG with foreign companies. The central government wants to review these Kurdish deals and bring them in line with oil laws valid in Baghdad.

Foreign investment is just starting to trickle in, but even with the rate promise of massive, untapped fields, global firms are wary of murky legal and regulatory framework underlying operations in Iraq.

-By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831 ; hassan.hafidh@dowjones.com

[edwarda]

Thank you for the news. I sure hope this will help get the HCL pushed along.

Thanks

[tjmunson]

It's like watching my 90 year old grandmother put together a jigsaw puzzle but at least the pieces are still fitting perfectly into place. Great article and great news. Thanks very nuch for the post.

Peace

[drox]

It's like watching my 90 year old grandmother put together a jigsaw puzzle but at least the pieces are still fitting perfectly into place. Great article and great news. Thanks very nuch for the post.

Hahahahahahaha!!! Priceless! Hey TJ... slip Granny some Red Bull and you know.... tell me what happens.

[RadioTom]

The HCL is the ways and means that IRAQ will benefit from it's drilling for black gold. This is what we've been waiting for in order for the IQD to have the firm footing to pay for an RV.

[Carrello]

There's a lot of pressure in those pipes, it has to blow soon.