Oil Report

INTERVIEW-Iraq oilmin sees irreconcilable split on oil law

ABU DHABI, Dec 5 (Reuters) - “Irreconcilable” differences between factions in Iraq’s parliament mean the country’s oil law will not be passed any time soon, the country’s oil minister said on Wednesday.

The law, which would help usher in new investment and one of a number of political benchmarks identified by Washington as critical for national reconciliation, was to have been passed by the middle of this year.

“So far, these positions seem to be irreconcilable for the time being,” Hussain al-Shahristani said. “Until there is a breakthrough, I don’t envisage that the law will be passed in the very near future.”

Iraq’s cabinet agreed a draft law for dividing the world’s third-largest oil reserves in February, but disputes with the regional government in Kurdistan, as well as objections from Shi’ite and Sunni Arab politicians, have hobbled progress.

Oil companies have been providing technical assistance and training to Iraq for years as they look to position themselves for contracts when the law is passed.

Iraq’s oil shipments have been rising in recent months because of more stable supplies of Kirkuk crude from the country’s north, allowing Baghdad to sell more barrels while oil prices are near a record high.

The Iraqi minister, who was speaking on the sidelines of a meeting of the Organization of the Petroleum Exporting Countries in Abu Dhabi, said he expected oil exports to remain around November’s rate into next year.

“In November, the average was 2.4 million barrels per day of production and exports were about 2 million,” he said. “Yes, absolutely,” he said, asked if that level was sustainable into 2008.

Exports in November eased to 1.79 million bpd, down from 1.84 million bpd in October, according to shipping data compiled by Reuters. October’s figure was the highest since at least September 2004. (Reporting by Alex Lawler, OPEC newsroom)