February 19, 2007

KARABILA A draft version of the long-awaited law that would govern the development of Iraqi oil fields and the distribution of oil revenues has been submitted to Iraq’s cabinet, the first step toward approving the legislation, two members of a senior negotiating committee said this weekend.

The move seemed to signal that negotiators had arrived at the outlines of a compromise that would satisfy the Kurdish, Shiite and Sunni members of the committee and break a deadlock that has held up approval of the law for months. Because the Iraqi budget depends almost entirely on oil revenues, the law is considered an essential element of creating a stable and functioning government.

Earlier drafts of the law described to The New York Times indicate that Iraq’s central government in Baghdad would retain substantial control over oil revenues and the right to review the contracts that regional governments sign with Iraqi and international companies to develop the fields and to pump oil.

Negotiations had snagged because of the insistence by the Kurds that they maintain a degree of autonomy in managing their northern fields. But two members of the negotiating committee confirmed that a draft had been sent to the cabinet, indicating that a compromise might be in sight.

Neither of those negotiators — Hussain al-Shahristani, the current oil minister, and Thamir Ghadban, a former oil minister — provided details of the compromise. But a senior official in the Kurdish regional government also said that a deal was near and hinted that the Kurds had received concessions on how the law would affect existing contracts with oil companies that agreed to work in the north.

If the cabinet approves the draft law, it would then be sent to Parliament for ratification. Parliament for the most part automatically passes laws that have been approved by leaders of the main political parties, which run along ethnic and sectarian lines. (NYTimes)