Iraq Oil Report

Plus:
*Iraq assurances to Lukoil not clear following massive debt forgiveness
*Electricity Ministry warns of even less power following more attacks
*Parliament’s passage of three key bills – analysis and understanding
*Much, much more…

Iraq’s legal framework is still uncertain, Big Oil firms say, though negotiations on oil and gas deals are ongoing and could wrap up by next month.

“Shell along with other major international oil companies are quite interested in future possibilities in the country of Iraq,” Shell Gas and Power Executive Director Linda Cook said Wednesday at an international energy conference in Houston, United Press International’s Ben Lando reports.

“My guess is every international oil company in the world, knowing Iraq is blessed with terrific god-given natural resources, is interested in Iraq,” ExxonMobil Corporate Vice President Daniel Nelson said.

The Iraq-Russia oil relationship is beginning to become less foggy, though not completely clear, now that Russia has agreed to forgive $12 billion in debt racked up by Saddam Hussein. The Financial Times’ Steve Negus reports Iraqi Foreign Minister Hoshyar Zebari, visiting Moscow, wouldn’t guarantee Russian giant Lukoil would get the $4B deal for the huge West Qurna oil field, but “they’re in a good position to offer Iraq a high return because they know the field.”

(Editor’s Note: You may be asking yourself ‘why does the new Iraq have to pay off the bills incurred by Saddam Hussein, especially considering those debt collectors – which include much more than Russia – have the blood of the Iraqis, Iranians and Kuwaitis the late dictator killed on their hands?’ Good question.)

Iraq’s Electricity Ministry said Iraqi citizens will see even less electricity as attacks on the infrastructure take their toll, Steve Lannen reports for McClatchy Newspapers. Lannen questions whether a new uptick in violence in the country means the surge success is “short-lived.” The Ministry of Electricity headquarters recently found a bomb on its doorsteps, a clear sign of how insidious the hostility is.

Iraq’s Parliament passed three key laws – the $48B ’08 budget, the law of the provinces and detainee amnesty – previously held up by the same sectarian differences holding up legislation on oil. But the deal making was more accommodation than reconciliation for sustainable progress.

“Passage of the measures represent a significant achievement for the Iraqi Parliament, which on many days could not muster a quorum,” Alissa J. Rubin wrote for The New York Times. “The approach of voting on the three laws together broke the logjam because it allowed every group to boast that they had a win. Leaders of the blocs — Shiite, Sunni and Kurd — realized that while no one of the laws could pass on its own, together, they offered something for each political constituency. So factions would swallow the measures they liked less in order to get the one they wanted.

Although passing the budget and other legislation offers some reprieve to the struggling government of Prime Minister Maliki, they raise several question marks, the ever spot-on Sam Dagher writes for The Christian Science Monitor.

And it comes from the Parliament just in time, as McClatchy Newspapers Baghdad Bureau Chief Leila Fadel explains, the vote was a day after the Speaker of Parliament threatened to disband the assembly and a day before a 5-week recess.

There are still numerous dilemmas to be solved, put off by this vote. The Kurdistan Regional Government received 17 percent of the budget, after national expenditures like defense, though other parties said its population (which the divvying was based on) is closer to 14 percent. This is only for 2008 and the discussion will be contentious for budget ’09 planning.

And the detainees, most of whom are Sunni and held without charge, is an important bone to a minority but powerful faction.

And although the provincial powers law included an date to hold provincial elections by year’s end, there are numerous logistical and political obstacles, despite the dire necessity of holding the vote.

A MUST READ: The Law on the Powers of Governorates Not Organised in a Region: Washington’s “Moderate” Allies Show Some Not-So-Moderate Tendencies, by Reidar Visser at www.historiae.org and research fellow at the Norwegian Institute of International Affairs. An excellent piece of prophecy.

Iraqi Kurdistan or just Kurdistan?, a question explored by the BBC’s Crispin Thorold in a look into the dispute between Iraq’s Kurdish government and the central government.

In its efforts to win support from Iraqis, the U.S. military has made $38 million worth of payments to the families of civilians they have killed since 2004, UPI’s Shaun Waterman reports. Most of the money has been distributed in the areas of the country where Iraq’s Sunnis live, and some Shiite dominated areas in the south have not received any funds.

The White House has proposed new rules to ensure U.S. tax dollars spent on contracts are better audited for fraud – except those contracts where work is done overseas, such as Iraq, The Associated Press reports.

The Iraq Press Roundup, by UPI’s Hiba Dawood.
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