Iraq Oil Law (Still) Coming Soon

DUBAI, United Arab Emirates, Sept. 4 (UPI) --The question is simple on the third and final day of a major Iraqi energy conference where hundreds of hungry oil men and women broke bread with Iraq's industry chiefs, politicians and technocrats: When will Baghdad set the ground rules for the international oil community's long-awaited venture into the largest oil prize on Earth?

The answer, evenly nuanced, is clear: A version of the Iraq oil and natural gas law was agreed to by most of Iraq's political leadership last week, and when Parliament resumes this week it will, possibly, debate the law and, perhaps, maybe vote on it soon.

"They have a deal on the government level. Once it comes to the Parliament, it is the Parliament who has to have the say," Abdul-Hadi al-Hasani, deputy head of Parliament's Energy Committee, said on the sidelines of the summit, though he hasn't seen the latest version of the bill yet.

"This is really a discussion taking place between all expertise, members of Parliament, economists, government officials," he said, adding the balance between Iraqi and investor interests isn't a quick resolve. "I wish it could have been passed yesterday. We need it. But simply it has to take its own time to come through maturely."

The world's leading hydrocarbons firms attending the Iraq Oil, Gas, Petrochemical and Electricity Summit, organized by the London-based Iraq Development Program, held roundtables over the future of Iraq's oil while planning deals to venture into its sister sectors. Yet, from the minnows to the giants, service firms and equipment providers, they wait, with billions of dollars, for this law, which has numerous times before been just around the corner.

Theirs aren't the only eyes on Iraq's oil, the third-largest proven reserves in the world, made more tempting when one considers how much of the country is unexplored. What has been found, usually close to the surface and sweet, is pumped and refined cheaper than anywhere else, except for the cost of producing amid war.

Iraq's political parties have no easy task, however, thus the delay to decide how large a role the federal government will have in deciding the country's oil strategy and, pushed by the powerful oil unions, the extent private and foreign hands will be allowed a grab.

President Bush arrived in Iraq Monday, just days before Parliament and the U.S. Congress return from recess, and with the upcoming war evaluation from top U.S. military and embassy officials looming.

Bush met with Prime Minister Nouri al-Maliki, vice presidents Adel Abdul Mehdi and Tareq al-Hashemi, President Jalal Talabani, Deputy Prime Minister Barham Saleh, and Massoud Barzani, president of the Kurdistan Regional Government, two Shiite Arabs, one Sunni Arab and three Kurds. Last week the Iraqis (minus Saleh) agreed on previously disputed points, including the oil law.

"This has principally been agreed to and now it's in the Parliament so there's going to be debate," said Ali al-Dabbagh, the government's spokesman. "It's just a matter of time."

"We can't say when it will be in," he said, "but as soon as it is started debated it is a sign that finally it will be approved. The government is asking the Parliament to put it in a priority in order to make the hydrocarbons industry to be activated."

Iraq is steadily producing 2 million barrels per day, sending more than three-quarters to the international market. Last year it earned more than $31 billion, fulfilling more than 93 percent of the federal budget. That's an income stream Iraq is keen not only on keeping going, but increasing.

Iraq's 115 billion barrels of proven reserves could sustain a higher production output. The goal is 6.5 million bpd by 2015, according to a presentation at the summit by Thamir Ghadhban, Maliki's top energy adviser and a former oil minister. The plan is to make use of Iraq's natural gas reserves as well, two-thirds of which is wasted, increasing production by 347 percent over eight years.