New Draft of Oil Law Could Mean More Hostilities for Iraq

Baghdad retains more power for itself at expense of Kurds, Shi'ites and Sunnis

The Iraqi cabinet has amended the draft of a much-debated hydrocarbons law, further complicating the delicate political atmosphere. The changes advanced could provoke political hostilities in oil-rich regions north, south and west of Baghdad.

Kurdish leaders immediately condemned the new draft, which supersedes a 2007 version, when it reached parliament on Aug. 28. In one of the most significant changes, the new law would give the oil ministry the right to sign all new contracts, undermining the Kurdish government’s alleged right to some contracts of their own. A Kurdish MP who is also a member of parliament’s energy panel declared this aspect unconstitutional. The law would also eliminate required Shi’ite, Sunni and Kurdish say in oil matters.

Kurdish leadership has long hoped the United States would resolve the oil and related Article 140 issues before its withdrawal from Iraq, which is now scheduled for the end of this year. Article 140 of the Iraqi Constitution pertains to historically Kurdish areas in northern Iraq that have, as yet, not been annexed to the autonomous region. Should they do so, it could mean those oil profits will bypass Baghdad entirely.

Many fields also lie south of Baghdad, where there is a separate autonomy movement. Although the bid for autonomy has been set aside for now, about two-thirds of Iraq’s known reserves are much closer to Basra. Should the south feel cheated, a civil war could easily erupt there.

Anbar province, home to many Sunnis and where a new oil field was discovered recently, has also called for more local control. Iraq currently averages 2.4 million barrels every day with the potential for a lot more. In any case, more debate is sure to follow.