Iraqis make progress on sharing oil sales

WASHINGTON, June 21 (UPI) -- Iraqi negotiators have come to an agreement on divvying up revenues from oil sales, a major, though not final breakthrough on a package of oil laws.

"The revenue sharing law has been agreed, last night," Ashti Hawrami, energy minister of the Kurdistan Regional Government, told United Press International Thursday morning from a mobile phone in Baghdad.

Hawrami has for the past 10 months led a delegation from the oil-rich and relatively violence-free northern Iraq region in negotiations with the federal Iraq government over a regime of four oil-related laws. They will determine the roles of the Ministry of Oil and Iraqi National Oil Co., what part of the 115 billion barrels of proven reserves the federal or local governments will control and how the proceeds from oil exports will be shared.

Iraq currently exports about 1.6 million barrels per day; last year the sales brought in more than 93 percent of the federal governments budget funds.

The revenue sharing law had taken a back seat to a law referred to as the hydrocarbons framework law, which would lay the ground work for oil control and, controversially, foreign investment.

But for the last month, Hawrami said, the revenue sharing has been on the front burner. Disagreements had been over how to split percentages and exactly the mechanism for collecting and redistributing the funds.

The new law would split revenue into external and internal accounts, to be divided between the regions -- Kurdistan is the only formal region currently -- and provinces, "after the deduction for the federal government's needs to do its federal duties," he said, "like defense and foreign office, the rest of it, which is according to the constitution."

"The external will capture all the oil revenue and any other revenue -- for example donations, loans and so on," Hawrami said. "All the internal taxes and customs collected on behalf or by the federal government will go to an internal account."

He said Kurdistan will be given 17 percent of those accounts, after the federal take, each month.

The KRG will publish the law Thursday on its Web site, Hawrami said. It is unclear when Parliament will take it up.

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Ben Lando, UPI Energy Correspondent