Iraq Oil Report

Iraq’s central and Kurdish region governments have reached a deal on an oil law, including a method for weighing the validity of the oil deals the Kurds have signed with foreign firms, the top government spokesman told United Press International.

Ali al-Dabbagh said an agreement has also been made on the classification and funding for the Kurds’ security forces, the Peshmerga, which will become a battalion within the Iraqi Ministry of Defense. And he said the sides agreed to allow the U.N. process for determining the future of oil-rich Kirkuk and other disputed territories to play out.

“There is an understanding between the central government and the regional government for the oil law,” Dabbagh said in a telephone interview from Brussels, where Iraqi Prime Minister Nouri al-Maliki is meeting with EU officials. Maliki’s governing coalition has seen defections and opposition growing over the past year. Dabbagh said political parties have recently pledged support, and meetings in Baghdad with top Kurdistan Regional Government officials have led to “a new atmosphere.” …

The February 2007 oil law draft establishes a federal oil and gas council that would serve as a policymaking body. Dabbagh said the council would decide national versus local control over oil and gas fields and exploration blocks, as well as the legitimacy of the KRG oil deals.

“This is going to be reviewed and is going to be checked whether they are workable with the new law or not,” he said. “If not they should be amended in order to have them matching with the new regulation of the oil law.”

He said a revenue-sharing law and legislation reconstituting the national oil company and reorganizing the Oil Ministry will “be passed simultaneously (with the oil law) and as a sort of compromise package.”

There are still issues to iron out before an agreement is finalized, he said. …

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Here’s a pdf file of the February version of the law.

Shares in Norwegian oil and gas producer DNO soared on Wednesday on the news, Wojciech Moskwa and Joergen Frich report for Reuters. DNO shares initially jumped by as much as 24 percent on media reports — later denied by Iraq’s oil ministry — of a completed deal for Baghdad to honour oil contracts signed by the Kurdish regional government.

The United Nations will suggest a formula next month to resolve conflicts on several disputed areas in Iraq that could serve as a template for the future of Kirkuk, Paul Taylor reports for Reuters. Staffan de Mistura, the U.N. special representative in Iraq, said he would propose options by May 15 for deciding under which authority to put four disputed locations, not including Kirkuk. He declined to identify them but said they would set an example. “This could show how Kirkuk could be handled. It is certainly a template for similar and other bigger problems,” he told reporters after talks with NATO and European Union officials.

Meanwhile, the European Union said on Wednesday it was close to clinching a preliminary energy pact with Iraq as part of the bloc’s efforts to reduce its heavy dependence on Russian oil and gas, Mark John reports for Reuters.

For more:
EU Hungry for Iraq Gas and Oil and Iraq-Turkey-U.S. Gas Talks Begin both by UPI’s Ben Lando.

Iraq’s Iskandariyah power plant runs on raw crude and at less than half capacity, but the country’s demand “is so great” there’s no time for maintenance, UPI reports.

The Iraqi government announced the creation of 2,000 jobs, half of which are in Basra, to help remove land mines in the country, UPI reports.

Conditions needed for Iraqi refugees and internally displaced people to return to their homes don’t exist, a U.S.-based refugee committee said Tuesday, UPI reports. “All relevant actors should discourage returns until the violence subsides and people can receive adequate assistance and protection,” Refugees International said in a report on Iraqi refugees and internally displaced people. “In particular, the government of Iraq should not use returns as an indicator of success in stabilizing the country.”
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