New Iraqi oil and natural gas law approved

Daily News Egypt
7 Min Read

The Iraqi parliament voted on Wednesday in favor of the long-discussed new Iraqi oil and natural gas law, thus allowing foreign investment in both sectors. The parliament specified that this law will allow the private sector to participate in the national re-building of Iraq, and it required that a minimum 75 percent of employees at oil refineries and companies must be Iraqi nationals.

The modified draft of the new law was approved a few days ago by the Iraqi government that convened without 13 of its ministers, and it was presented by the Iraqi Prime Minister Nouri Al-Maliki to parliament for discussion and approval. The draft oil and natural gas law was originally endorsed by the Iraqi cabinet last February amid internal opposition from different ethnic and sectarian factions in Iraq.

Such opposition led the Iraqi government to adopt a modified draft comprising 20 clauses relying on clauses 61, 73 and 112 of the Iraqi constitution.

The modified proposed law claims that Iraqi oil and natural gas resources should be owned by all Iraqis and run by an Iraqi National Oil Company that is centralized in Baghdad and is accountable to both the government and parliament.

Its stated goals include the equal distribution of Iraqi wealth and the maximization of production by reopening the wells sabotaged since the American intervention in Iraq in 2003 and by drilling more unexplored oil wells. Recent studies estimate that Iraq has the third largest oil reserves in the world amounting to proven 115 billion barrels and to potential 214 billion barrels if unexplored wells in the western areas are drilled. Iraq also has a reserve of natural gas that reaches 3 trillion cubic meters.

The proposed draft has been severely criticized by numerous Kurdish, Sunni, and Shia leaders on the basis of opening the door for foreign intervention in Iraq in a manner that will undermine the nationalist achievements since its independence. The second clause of the draft law underlines the need for training and technical assistance while other clauses focus on using investment as a means to maximize production and profit. The opposing leaders directly relate such actions to the undermining of Iraqi sovereignty. Demonstrators in Basra by the Iraqi Petroleum Pipelines Company workers issued pamphlets describing the officials behind the drafting of the law as “agents to the imperialist occupiers .

The Iraqi Association of Muslim Scholars issued a fatwa that forbids the approval of the law because of its potential damage to the national interest of current and future Iraqi generations.

The government of Nouri Al-Maliki may be using the modified oil and natural gas law as a last resource to get out of its current political impasse by energizing the economy; however, Al-Maliki is definitely overlooking the serious aspects of such a move.

Passing of the new law has an ethnic aspect that will antagonize the Kurdish government, which has already secured 17 percent of all oil revenues after a deal with the federal government. The new law, now passed, will abolish all previous contracts and deals and redistribute the oil revenue according to national needs and population distribution, not to regional production.

On the other hand, the law has a sectarian aspect which implicates the Sunnis. The Sunni regions that have traditionally had the least oil resources will be implicated in a potential plot with the Americans to redistribute Iraqi oil wealth to their interest.

Another aspect that is being overlooked by Al-Maliki is the security aspect. The incoming foreign investors will represent a continuous target for Al-Qaeda terrorists as well as other militant Baathist and Islamist insurgents.

The new security plan seems to have decreased the terrorist threats within the Baghdad region, but both the Iraqi and American forces are still ferociously fighting the insurgents elsewhere.

The Sunni Accord Front, the largest Sunni group in the Iraqi parliament, has recently declared the end of its boycott to the parliamentary sessions. This declaration came some days after the Sadrist Trend ended its boycott as well.

The boycott of both groups happened because of sectarian reasons with the Accord Front objecting to the temporary replacement of Mahmoud Al-Mashhadany, speaker of the Iraqi parliament by the Shia deputy speaker Khalid Al-Atteya, while the Sadrist Trend objected to the inability of the government to protect Shia civilians and sites.

Both groups have been pressured to end their boycott so that the parliament can discuss the proposed oil and natural gas law. Even though none of them officially declared their stance regarding the law, they agree about the need for the redistribution of oil wealth while the Kurdish groups completely disagreed about the adoption of such a law describing it as reminiscent of the Baathist nationalist measures.

The parliament finally put an end to the row over the hotly debated law despite calls to postpone any decisions. The internal fury over the law in the midst of all the other troubles the Iraqis are suffering are definitely still ringing a loud bell against the repercussions of its adoption

Omneya El Naggar, MA, Political commentator, researcher in comparative politics in the Middle East. She has also done research on political Islam, terrorism, and East-West dialogue. This commentary is special to Daily News Egypt.

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