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Iraqi Oil Minister Releases New Draft Hydrocarbons Law January 21, 2007

Posted by notapundit in World News.
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BAGHDAD (AP)–A new draft hydrocarbons law will pave the way for “transparent and fair” competition in bids to develop Iraq’s oil wealth, the oil minister said Sunday as he seeks to restore the confidence of global oil companies in the national industry.

The oil minister, Hussain al-Shahristani, said new oil fields will be added as new tenders will be issued according to this law for global oil companies.

“The competition will be transparent and fair and companies will be chosen according to their modern technological capabilities to guarantee the highest benefits for Iraqis,” al-Shahristani said at a news conference. “We will not consider their nationalities and we will ignore any contract doesn’t achieve the highest benefits.”

Al-Shahristani refused to say how long the law will take to be approved by the parliament and didn’t release more details about the negotiating mechanisms the ministry will adopt for dealing with global companies.

The oil minister also cautioned that attacks against oil installations and employees were increasing, saying that 289 oil employees were killed over the past year and 179 others were wounded.

“The ministry is always suffering from these terrorist attacks. I call upon all honest people to cooperate with the oil ministry in order to find those who are attacking the employees of this sector and provide us with any related information,” he said.

Insurgents have frequently targeted oil facilities, pipelines and employees, disrupting exports and efforts to modernize the industry.

The new law, if approved, is expected to encourage foreign oil companies with their huge investment clout and technology to quickly modernize Iraq’s oil sector and meet the country’s goal of doubling the current crude production of 2.5 million barrels per day by 2010.

The oil minister stressed that all Iraqis will share in the benefits amid concern by many Sunnis that they will lose out as the country’s two chief oil region – in southern and northern Iraq – are dominated by Shiites and Kurds, who want regional control over oil production and revenues.

Iraq’s Sunni Muslims and much of the Baghdad government want to maintain national control over Iraq’s petroleum resources as was the case during former leader Saddam Hussein’s Sunni-dominated regime.

“The constitution states that oil and gas are for all Iraqis in all provinces and regions and according to this conception we drafted this oil law to help promote Iraq’s unity and prosperity of its people,” he said.

Last Thursday, the ministry’s spokesman Assem Jihad told The Associated Press that the law stresses that all oil revenues will go to a central fund, then will be distributed to all Iraqis in all regions and provinces according to their populations.

Jihad added that the law provided for all oil contracts signed by Saddam’s regime or by the semi-autonomous northern government of Kurdistan to be reviewed and amended if needed.

Iraq’s proven oil reserves stand at about 115 billion barrels, the world’s third largest after Saudi Arabia and Iran.

On a technical matter, al-Shahristani said that a new metering system to track oil and gas flows from Iraq’s southern export ports has been fixed.

Iraq’s economy has been severely weakened by oil smuggling to neighboring countries, a problem that could be checked in part by the presence of a metering system. The smuggling has created a fuel crisis that leads to occasional shortages even though Iraq is one of the world’s leading producers of oil.

Some experts believe that oil smuggling may be funding Iraq’s insurgency.

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