Top Iraq MP: Constitution fix then oil law

WASHINGTON, Feb. 11 (UPI) -- Political disputes over Iraq's Constitution need to be resolved before progress on the oil law, said the deputy head of the Parliament's Energy Committee.

"This will make the way to pass the law of oil and gas," Abdul-Hadi al-Hasani told United Press International in a phone interview from London. "It will be very easy to be passed because we won't have any disagreements. Roadblocks now are not technical, they are political."

Iraq's Constitution was written vague enough to garner enough support for passage in 2005, but the lines of control over Iraq's oil sector and other issues of federalism are now unclear. Iraq's Kurds support a more decentralized version than most parties in the national government, and both claim the Constitution backs their position.

An oil law has been under negotiations for more than a year. Hasani said his committee, which is to vet a version to be voted on by the entire Parliament, was given four different versions.

At issues is not only varying interpretations over oil control, but how international oil firms will be given access to the currently nationalized Iraq oil sector -- the third largest in the world.

Experts predict there's much more oil -- perhaps double the 115 billion barrels of proven reserves -- to be discovered once Iraq is fully explored. Iraq has sizeable gas reserves and potential is great as well.

Iraq's Kurds, frustrated by Baghdad's deadlock, passed their own regional oil law and signed dozens of controversial production-sharing contracts. Iraq Oil Minister Hussain al-Shahristani has called them illegal, saying it is the national government's job to sign such deals. He has threatened companies that signed with the Kurdistan Regional Government will be blacklisted from upcoming bidding rounds for fields in the rest of the country. SK Energy of South Korea and Austria's OMV have already been cut off from Iraqi crude supplies.

The oil law is part of a package of legislation, which includes laws governing the collecting and redistribution of all revenues, the reorganization of the Oil Ministry and the reconstitution of the Iraqi National Oil Co.

Hasani said it's important to equip and train INOC to be a modern state-owned oil company with a major role in developing Iraq's oil sector. He said international oil companies are needed as well, both to develop the oil and help stand up INOC.

"However," he added, "we don't want to lose our own sovereignty, our own interest and our control over the oil."

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)