Iraq sees progress in Arbil oil discussions

BAGHDAD - Reuters

The KRG is reportedly ready to restart talks with Baghdad over oil law. REUTERS photo

The Kurdistan Regional Government (KRG) is ready to restart negotiations with Baghdad to end a political crisis, focussing on a long-delayed oil law to hand regional authorities more say in managing energy resources, Iraq’s Deputy Prime Minister Rosh Nuri al-Shawish, a Kurd, said.

The positive tone from Shawish signaled the Shi’ite-led central government and self-governed KRG may be edging towards easing their dispute over oil, territory and power-sharing that is straining Iraq’s uneasy federal union.

“Approving this draft and adding some amendments which are agreed on by all parties ... is the proper way to resolve this,” the deputy prime minister, one of the go-betweens for talks between Baghdad and Arbil, said in an interview.

Shawish said Kurdish officials had met with the head of the Prime Minister Nuri al-Maliki’s Shi’ite National Alliance, Ibrahim al-Jaafari, for preliminary talks, and the atmosphere had improved enough for them to see room for progress.

Shawish told Reuters the KRG believes the oil disputes can be resolved through an amended 2007 draft of an oil and gas law, which all parties had agreed to previously.

The KRG has tested Baghdad’s resolve for months by signing deals with foreign oil majors, such as Exxon and Chevron, contracts the central government rejects as illegal and part of a Kurdish push for more autonomy. Baghdad and the Arbil are currently fighting over exports. The KRG has threatened to stop its share of national oil exports at the start of September, claiming Baghdad is not fulfilling payments to companies working there.

Iraq says the KRG authorities have not supplied the correct paperwork and receipts for an audit of payments.

Adoption of the new oil and gas law has long been considered critical to the success of Iraq’s rapidly developing oil sector, although Baghdad has signed multibillion-dollar contracts with global oil majors despite antiquated legal safeguards.

 Last year, Maliki and the KRG agreed by December 2011 they would either amend the 2007 hydrocarbons law as agreed by all political factions or adopt the 2007 law as is. But that deadline past without agreement.