Thursday, May 10, 2007

 

Why Iraqis cannot agree on an oil law

Oil
Lionel Beehner from the Council on Foreign Relations discusses what the oil law is about, the difficulty of drafting the oil law, the main points of contention, how much oil Iraq has, why oil production has stalled and how long it will take for the draft oil law to pass.
Disagreements over oil and revenue sharing threaten to unravel hopes for a political breakthrough and national reconciliation in Iraq. A draft oil law has drawn criticisms from Iraq’s Sunnis, who prefer a stronger role for the central government, and from Kurds, who prefer a stronger role for the regional authorities. The majority Shiites have sought to mollify the Sunnis by keeping control of Iraq’s oil sector in Baghdad, not the provinces. The role of outside investors, as well as the classification of old versus new oil fields, also divides Iraqi politicians. Oil, of course, is the country’s most vital resource, accounting for 95 percent of government revenue. Yet output has fallen well short of Baghdad’s production targets, mostly due to corruption, poor security, and lack of investment.
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