Iraqis make progress on sharing oil sales

WASHINGTON, June 21 Iraqi negotiators have come to an agreement on divvying up revenues from oil sales, a major, though not final breakthrough on a package of oil laws.

"The revenue sharing law has been agreed, last night," Ashti Hawrami, energy minister of the Kurdistan Regional Government, told UPI Thursday morning from a mobile phone in Baghdad. Hawrami has for the past 10 months led a delegation from the oil-rich and relatively violence-free northern Iraq region in negotiations with the federal Iraq government over a regime of four oil-related laws. They will determine the roles of the Ministry of Oil and Iraqi National Oil Co., what part of the 115 billion barrels of proven reserves the federal or local governments will control and how the proceeds from oil exports will be shared.

Iraq currently exports about 1.6 million barrels per day; last year the sales brought in more than 93 percent of the federal governments budget funds.

The revenue sharing law had taken a back seat to a law referred to as the hydrocarbons framework law, which would lay the ground work for oil control and, controversially, foreign investment.

But for the last month, Hawrami said, the revenue sharing has been on the front burner. Disagreements had been over how to split percentages and exactly the mechanism for collecting and redistributing the funds.

The new law would split revenue into external and internal accounts, to be divided between the regions -- Kurdistan is the only formal region currently -- and provinces, "after the deduction for the federal government's needs to do its federal duties," he said, "like defense and foreign office, the rest of it, which is according to the constitution." "The external will capture all the oil revenue and any other revenue -- for example donations, loans and so on," Hawrami said. "All the internal taxes and customs collected on behalf or by the federal government will go to an internal account." He said Kurdistan will be given 17 percent of those accounts, after the federal take, each month.

The KRG will publish the law Thursday on its Web site, Hawrami said. It is unclear when Parliament will take it up.

We have to remember, the federal government of Iraq must adhere to a constitution, they in effect wrote and then voted on.
If the splits in internal verse external are found to be equitable by a majority vote in Parliment, bingo, they have passed one huge hurdle.
It sends signals to the world, Iraq will be in the oil business in a big way.
A lot of money will be invested in building up their oil drilling capacities, refineries, pipelines, most likely associated petrochemical plants etc..
Many jobs for Iraqi in all the provinces will be derived which are directly related to oil/gas/refining, as well as things such as transportation and distribution.
And Iraq has mineral resources other then oil/gas such as uranium, potash, which can be further increased due to monies becoming available.
At any rate. I am glad to see they finally have addressed the issue. It is vital to their future success. As the ME slowly modernizes in principle, Iraq could become an industrial hub. Such countries along with democratic government tend not to tolerate civil strife. In short, the gig will be up for all those that do not want to see Iraq succeed. Their military and police continue to build, so they in the not so distant future will be able to put down anyone that tries armed rebellions etc..
As things improve, perhaps they will better address the need to show the world they are willing to respect the human rights of all their citizens regardless of their ethnic/religious backgrounds.
But perhaps I put the apple cart before the horse. A lot has yet to be accomplished both domestically, commercially, as well as security wise.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.