Iraq Oil Law “On Ice”

Oil giants BP and Shell maintain that they are still negotiating about short-term oil contracts in Iraq, despite comments a few days ago to the contrary (see blog) .

However, the controversial oil law, which is seen as the key that will unlock the jewels of Iraq’s oil reserves for the oil majors in now said to be on “ice”.
“Negotiations go on,” a Shell spokesman said about the short-term technical contracts.
“As far as we are concerned, negotiations continue over the technical service contract,” Steve Peacock, president of BP’s Middle East and South Asia exploration and production unit, also told Reuters about the contracts.
Meanwhile the controversial “oil law” is now said to be completely deadlocked. At a recent meeting with journalists in Baghdad, the U.S. Embassy’s outgoing economic ambassador, Charles Ries, admitted that political differences blocking passage of the so-called hydrocarbon bill are too entrenched to predict when it might become law.
“I was quite optimistic when I got here,” said Ries, who arrived in July 2007. “I was quite optimistic it was only a month or two” before the bill passed. “The more I understood what the real issues were … it was clear this was going to be a major political challenge.”