Analysis: Iraq oil law changes irk author

The role of Iraq's central government as a guiding hand over the country's vast oil reserves has been so altered in the current version of the controversial draft oil law that two of the document's authors now oppose it.
"The judgment of many is if the oil and gas is the property of the whole nation, it should be managed by whom? The custodian of the whole nation, and that's the federal government," said Tariq Shafiq, a London- and Amman, Jordan-based consultant and director of Petrolog & Associates. Shafiq, who just last summer was crafting the legislation, told UPI during a recent Washington visit that subsequent revisions have watered down the central government's role with political bartering that will lead to mismanagement of the world's third-largest oil reserves. Shafiq also warned of overdevelopment of the country's oil and gas resources, especially if the undiscovered reserves are developed or Kurdistan or other regions develop their fields outside of a central oil strategy.
The law, which was approved by the council of ministers in February, is now stalled in a power struggle between the central government and Kurdistan Regional government over how much of the 115 billion barrels in proven oil reserves each side will control. Various factions, including the powerful oil unions and Sunni political parties, have warned against allowing international oil companies too much access.
And the Iraqi Parliament likely won't be able to overcome political friction, let alone the deteriorating security situation in the country, to move forward soon on the oil law.
"The pledge by some Iraqi politicians to pass the new oil law by the end of June is not likely to be fulfilled, and Iraqi lawmakers are not expected to tackle this issue until after the parliamentary recess scheduled for the end of July," Greg Priddy, global energy analyst at the business risk consultant Eurasia Group, wrote Tuesday in the firm ' s Energy Trendwatch. "By then, all branches of the Iraqi government will come under tremendous pressure from the U.S. administration, which has listed the new hydrocarbon law as a major priority to be addressed by mid September, when it is expected to submit a full report to the U.S. Congress." The roots of the Baghdad row -- which highlights the future of Iraq: how strong the central government will be and how much power the regions and provinces will wield -- are seeded in the 2005 constitution. Key issues of federalism and control over oil were left vague to shore up enough support for passage. Nearly two years later, there is no political consensus.

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