Iraqi Oil Law Stalls Over the Summer

At last some good news from Baghdad. The Iraqi parliament has gone into summer recess without passing Iraq’s controversial and flawed oil law.
Bush must be irritated, since passage of the law was billed as a “benchmark” in its battle to get Congress not to set a timetable for US troop withdrawals.
The Guardian reports that the “real reason why the Bush administration wanted the oil law rushed through was that it feared public discussion, and was worried that the more people understood what the law entails, the greater the chances of its defeat. Key parties in the Iraqi parliament oppose it, including the main Sunni party – which this week withdrew from government – as well as the Shia Sadrists and Fadhila.”
Confirming Iraqis suspected opinions of the oil law, Oil Change International and others released a poll that shows Iraqi opposition to foreign investment by a factor of two to one.
Washington has promoted the law as a “reconciliation” issue, claiming its early passage would show that Iraq’s ethnic and sectarian communities could share revenues on a fair basis. But this is a trick. Only one of the law’s 43 articles mentions revenue-sharing, and then just to say that a separate “federal revenue law” will decide its distribution. The first draft of this other law only appeared in June, and it is clearly unreasonable to expect the Iraqi parliament to pass it in less than two months.

As we have repeatedly warned the oil law would set the arrangements for foreign companies to operate in Iraq’s oil sector. The Guardian quotes Greg Muttitt, from UK -based Platform, warning that the Iraq oil and gas law could “sign away Iraq’s future”. Greg says: “The law is permissive. All of Iraq’s unexploited and as yet unknown reserves, which could amount to between 100bn and 200bn barrels, would go to foreign companies.”

No wonder Bush’s key benchmark has stalled, possibly for good. Something else for the President to worry about on his holiday.