Iraqi Parliament debates oil law next week

HOUSTON, Nov. 6 (UPI) -- Iraq's Parliament will begin debate next week over the long-stalled and highly controversial oil law, the first post-Saddam Hussein law governing oil and gas.

The first version of a new oil law was approved by negotiators in February 2007, but the political road has been rough for the legislation. It's seen by some as necessary for bringing needed foreign investment; others say it will guide Iraq in rebuilding its own domestic oil company strength.

Four different versions have been pushed through the Council of Ministers and to the Parliament Oil and Gas Committee, but none has had enough legal standing.

Ten days ago a new version was approved by the council, Abdul-Hadi al-Hassani, the deputy chairman of the committee, said during an oil conference in Houston.

Next week the draft law will get a first reading, which will open the door to the first all-Parliament debate on the law, said Hassani.

"It's one important step which is going to be implemented and an effective tool to comfort the investor," he said, to protect their investment while regulating it for the benefit of Iraqis.

The version approved by the council isn't agreed to by the Kurdish Coalition, which sees in it too strong of a central government control. The February 2007 version -- incomplete but workable, Kurdish leaders have said in the past -- was amended by the Shoura Council, a legal review body, and also includes changes by the Ministry of Oil.

Jonathan Morrow, top legal adviser to the Kurdistan Regional Government's Ministry of Natural Resources, said during the Houston conference the new version is "unacceptable to the KRG." The KRG wants a decentralized oil sector and has signed dozens of deals with international oil firms.

From the February 2007 negotiations until now, political negotiations have occurred behind closed doors.

In Parliament, at least in concept, Iraqis will see their elected officials hash the issues: whether oil-producing provinces and regions will have a strong role in oil development, and to what extent international oil companies will be allowed into the nationalized oil sector.

Iraq requires tens of billions in investment to bring its massive but underdeveloped energy sectors to the standard befitting the world's third-largest oil reserves and 10th-largest gas reserves. Some see foreign investment as a way to unlock state resources. Others, a larger percent, want to restore the once prominent Iraqi oil industry, especially in a region where national oil sectors, such as Saudi Arabia, are successful.

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)