January 30, 2012 / 5:10 PM / 8 years ago

Iraq parliament could see new draft oil law in Feb

LONDON, Jan 30 (Reuters) - After five years in the making, Iraq’s parliament could have a first reading of a landmark oil law by early February, a senior Iraqi energy official said on Monday.

Adnan al-Janabi, head of Iraq’s oil and energy committee, said he “hoped for some movement next month” on the legislation that is crucial to resolving a bitter feud between Baghdad and the semi-autonomous Kurdistan region over oil rights.

Janabi’s committee has been poring over two versions of text that address the core disagreements between Baghdad and Arbil: the role of the governorates, the composition of the federal council, the ability of the regions and governorates to sign contracts and the issue of previously signed contracts.

“My committee for more than a year has been debating, trying to focus on where to go,” Janabi told reporters on the sidelines of an oil conference. “We are very close to going forward to parliament for a vote - and parliament will decide on which wording they will use.”

He said one version considered all of the existing oil development contracts to be legal and another called for the deals to go through a “review process”.

Janabi said that ultimately it was the job of the federal council to decide the fate of Iraq’s existing oil contracts.

Baghdad has signed a series of service contracts with foreign oil companies that targets production capacity of 12 million barrels per day by 2017 - up from about 3 million bpd.

Arbil has sealed more than 40 production sharing contracts with foreign firms: exports have been running around 100,000 bpd. Kurdish authorities insist they should keep the right to manage oilfields in their region and have the right to strike deals, a demand seen by Baghdad as undermining its central control over this vital industry.

A move by Exxon Mobil to sign an exploration deal with Kurdistan further fanned the flames and Baghdad threatened to take action against the oil major, which also has a deal with the central government to develop a southern oilfield.

The new hydrocarbons law is crucial to Iraq’s efforts to rebuild from decades of wars and sanctions by providing investors with a more solid legal framework.

But it has been held up by infighting among the Shi’ite, Sunni and Kurdish political groups that form Iraq’s fragile coalition government led by Shi’ite Prime Minister Nuri al-Maliki.

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