MPs from the ruling State of Law Coalition and the Kurdistan Alliance confirmed the presence of positive vibes between the federal government in Baghdad and the Kurdistan Regional Government (KRG) in Erbil regarding the possibility of passing the Oil and Gas Law, which governs the management of oil wealth in the country. The law is supposed to be passed during the current legislative session, which ends in early 2014. However, the MPs preferred to maintain discretion regarding information on the final draft of the law.
A high-ranking source in the office of Iraqi Prime Minister Nouri al-Maliki told Al-Monitor that “Prime Minister Maliki and KRG President Massoud Barzani discussed during the latter’s latest visit to Baghdad an amended draft of the Oil and Gas Law and agreed on showing it to their partners, so that it can soon be passed in the Iraqi parliament, before the current legislative session ends in early 2014.”
However, the federal government and the semi-autonomous KRG disagree on oil and its imports in the northern provinces. While Baghdad demands that the agreements with foreign and local companies on the drilling operations happen with its knowledge and that the region send the export revenues to the federal government, the Kurdistan region wants the federal government to pay the dues of oil companies working for it, before requiring oil revenues to be sent to Baghdad.
The Oil and Gas Draft Law has undergone several amendments since 2011, but it has not received the needed consensus yet.
On July 7, 2013, Barzani visited Baghdad and met with Maliki amid a positive atmosphere, favoring the resolution of the pending issues between both sides, namely the distribution of oil wealth management powers in the country.
Kurdish MP Farhad al-Atroushi, who is close to Barzani, told Al-Monitor, “The current phase is witnessing an agreement between Baghdad and Erbil regarding the Oil and Gas Law.”
Atroushi, an MP in the Iraqi parliamentary Oil Committee, added, “The Law of Provincial Authorities that was recently legislated and that granted local governments the privilege of participating in the management of oil wealth with the federal government pushes the latter to legislate the Oil and Gas Law, to reach a final decision regarding the situation in the Iraqi Kurdistan Region. Otherwise, chaos will break loose in the Iraqi oil sector.”
He continued, saying, “I cannot say that Barzani and Maliki have agreed on passing the Oil and Gas Law, but they see eye to eye on this matter.”
He said, “This issue will be settled during the discussions of the sub-committees that were set up for this purpose between Baghdad and Erbil.”
According to Atroushi, “It is better for the central government to enact the Oil and Gas Law, even if it grants [the Kurdistan region] broad powers to enter into contracts with foreign oil exploration companies.”
In a news conference held following Barzani and Maliki’s meeting, the latter talked about the importance of “resolving in a realistic and brotherly way” the problems between Baghdad and Erbil. Barzani, however, said that his visit to Baghdad was designed “to send a message to the external and internal arenas that we are brothers, and are keen to communicate [with each other]. This is particularly true since we live in a region full of problems and crises, which we will overcome based on cooperation between us.”
In parallel, Jamal Bahauddin, a member of Maliki’s State of Law Coalition, said, “Ongoing discussions and meetings on the oil and gas legislation between the Kurdistan Region and the federal government are taking place.”
Bahauddin, who is also a member of the Iraqi Parliamentary Oil Committee, said in a statement to Al-Monitor, “There has been a convergence of views, but nothing has been decided yet.”
Asked whether or the Iraqi parliament would pass the Oil and Gas Law before the current session expires, he contented himself with saying that “there are sub-committees, [including members from the various] political blocs, that were set up to negotiate this matter, and they continue to hold meetings.”
The Iraqi parliament formed in September last year a sub-committee to examine the controversial issues in the Oil and Gas Law and to develop a new draft.
Furat al-Shara, a member of the Oil Committee, said, “The heads of Iraq’s political blocs must take advantage of the political calm that followed the visit of the Kurdistan region’s president to Baghdad to pass the Oil and Gas Law.”
Speaking to Al-Monitor, Shara, a member of the Islamic Supreme Council of Iraq headed by Ammar al-Hakim, said, "The Oil and Gas Law is under discussion in all basic, strategic and high level sessions. For this reason, ad-hoc committees were formed to approve it.” He confirmed that “the members of the parliamentary Oil Committee will submit the recommendations of the ad-hoc committee to approve the law.” Yet, he refused to disclose these recommendations.
Shara added that “it seems that everyone objects to allowing this law to be transferred to the next parliamentary session.”
Omar al-Shaher is a contributor to Al-Monitor’s Iraq Pulse. His writing has appeared in a wide range of publications including France’s LeMonde, the Iraqi Alesbuyia magazine, Egypt’s Al-Ahaly and the Elaph website.