Iraq oil law talks ongoing, no progress

WASHINGTON, May 25 (UPI) -- Iraqi negotiators, under pressure to move fast and facing a deadline they likely won't meet, haven't agreed on a law governing oil and natural gas reserves.

"Nothing to report yet, no progress, we are still in Baghdad," Ashti Hawrami, energy minister for the Kurdistan Regional Government, wrote in an e-mail to United Press International Friday, "and have lined up more meetings to see if the remaining issue can be resolved."

The KRG is pressing for greater control over the oil resources in its northern region, opening up the country's vast reserves to the free market and ensuring the revenue from oil sales is distributed with an even and apolitical hand.

Sunnis and most Shiites want a strong central planning and control over the third-largest oil sector in the world, via a reconstituted Iraq National Oil Co.

The unions are threatening to strike if, among other demands, foreign companies are given access to and ownership of the oil.

Meanwhile the needed investment in the struggling sector -- from both domestic and foreign coffers -- is waiting for the law to be passed, as well as security to improve. Iraq produces about 2 million barrels per day, far less than before the war. Its estimated 115 billion barrels of reserves can handle much more than that, but its infrastructure can't. Iraq exports about 1.6 million bpd, the revenue from which supports more than 93 percent of the federal budget.

The U.S. government -- both President Bush and the Congress -- are urging Iraqi leaders pass the law, though Iraqis say the U.S. pressure is making matters worse. Campaigners and some members of Congress say the pressure is pushing the law toward a big boon for the international oil industry.

Iraq oil experts warn the law should be put on hold until constitutional issues are addressed first and the violence subsides.

A summit scheduled for next week in Dubai, United Arab Emirates, aimed at bringing investors and Iraq's leaders together, was postponed this week, further evidence a self-imposed end of May deadline to pass a law will be missed.

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Ben Lando, UPI Energy Correspondent