Thread: Iraqi/Dinar news until March 1st, 2007

Barely two days have passed since Iraq's Prime Minister Nouri al-Maliki hailed the country's new petroleum law as a "solid base for unity of all Iraqis" — a rare boast these days. President Bush has also trumpeted it as proof that Iraq has a viable future. But parliamentarians and Iraq's oil unions have already begun mobilizing against the draft legislation, arguing that it is a desperate attempt by al-Maliki's government to satisfy Western demands, which could damage Iraq's economic future and speed the country's ultimate disintegration.

The law is a dramatic break from the past. Foreign oil companies will have a stake in Iraq's vast oil wealth for the first time since 1972, when Iraq nationalized the oil industry. In theory, that could finally fix Iraq's shambolic oil sector, whose infrastructure has been crippled by decades of wars and sanctions. Production these days hovers around 2 million barrels a day, a big drop from Iraq's prewar peak of more than 3 million barrels a day.

But political infighting could yet scuttle the deal once it goes to a vote in parliament, perhaps in early March, say the law's detractors. "The feeling is that the law is focused very much on sectarianism," says Saleh al-Mutlaq, who heads the National Dialogue Front, a small secular party with 11 seats in parliament. "It divides the country and the wealth into groups — Kurds, Sunnis, Shi'ites," he said on the phone from Amman on Tuesday.

Some Sunni groups fear that their less oil-rich areas could lose out when Iraq's potentially huge wealth is distributed. The ability of regions to sign their own contracts was bitterly argued for months by negotiators from Kurdistan, where there is deep distrust of Baghdad's politicians. Under the law, companies can deal with both the central Ministry of Oil, as well as regional entities. But that concession has provoked intense anxiety that Iraq could break apart, if some regions — or perhaps even powerful Shi'ite clans in southern Iraq — calculate that they can finance autonomous states from their massive oil deposits.

Billions of dollars — and Iraq's future — are at stake. Virtually all the revenues Iraq has to rebuild its shattered economy will come from its mammoth energy deposits — some of the world's biggest untapped reserves — of about 115 billion barrels of oil and about 110 trillion cubic feet of natural gas. In addition, Iraq's major creditors have made clear they expect a working oil industry, as a precondition for forgiving billions of dollars in Iraqi debt incurred largely by Saddam Hussein's wars against Iran and Kuwait and by his mega-splurging at home.

Under the new law, agreed on Monday by Iraq's cabinet, foreign oil companies will be allowed to cut long-term exploration and development deals with the government for 20 years, renewable for a further five years. Companies willing to operate in a country with high physical risks — insurgents regularly blow up pipelines and kill contractors — will be allowed to export their oil after paying the government a minimum 12.5% royalty, although there are usually also cash signing bonuses to the government, and most "profit oil," extracted after operating costs are met, would likely go to Baghdad. Regional governments — only Kurdistan has one right now — can sign their own contracts under the law, a dizzying change from decades when Saddam dictated the terms and stifled oil production in Kurdistan. A Baghdad-based Federal Council on Oil & Gas will be formed; it will have 60 days to appoint a team to arbitrate a contract, if it has strong concerns.

Despite the grumbling from politicians, it is still unclear whether opposition to the law is strong enough to kill it. Among the parliamentarians arguing against the law are Moqtada al-Sadr's bloc, which fears that foreign oil companies will move into Iraq in force, and stay long after U.S. soldiers have left. But logistically they will have to race back to Baghdad to vote against it. Many parliamentarians, like al-Mutlaq, spend much of their time outside Iraq — al-Sadr himself is frequently in Iran. "I'm going back for this very reason," al-Mutlaq says. "We cannot yet figure out how many people will stand against it." He says he is certain he will find allies among his colleagues, who he says believe that the law is geared to the needs of Western oil companies rather than Iraqis. There has been no public hearing on the draft, whose details have largely been kept secret. Iraqi lawmakers fumed last July when U.S. Energy Secretary Samuel Bodman discussed the draft during a trip to the region, "when hardly a single parliamentarian had seen it," says Kamil Mahdi, an Iraqi who is senior lecturer in Middle East economics at the University of Exeter in Britain, and who spent Tuesday discussing the law by phone with several parliamentarians. He said several believe that the government should wait until the war ends before locking Iraq into long-term deals with foreigners, he says. "This draft is totally out of synch with any notion of the interests of Iraq," he says.

The rumblings of opposition go beyond parliament to the oil fields themselves. Iraq's biggest oil unions, which could potentially disrupt production, have been among the law's strongest opponents. Hassan Jum'ah Awwad Al-Asadi, head of Iraq's Federation of Oil Unions, the largest union group, says he intends to mobilize his 23,000 or so members against the draft. "We want a new, different law, which will be in the interests of Iraqis," he said by phone from Basra on Wednesday. "If there is no solution we can stop production, stop exports." In a more threatening tone, he told union members at a conference on the law in Basra in early February: "We strongly warn all the foreign companies and foreign capital in the form of American companies against coming into our lands under the guise of production-sharing agreements."

The view inside the negotiating room, through months of wrangling over the law, was starkly different. At least one person who sat through the talks said he was amazed to find that U.S. officials and diplomats appeared to lie low, perhaps because they were overwhelmed by fighting the war. "The U.S. was so afraid to be seen to be meddling in Iraq's oil that they took a backseat," says Jonathan Morrow, legal adviser to the Kurdistan Regional Government and a former senior legal adviser to the U.S. Institute of Peace in Washington. Rather than simply satisfying oil companies, the new law "offers oil companies risk and reward" deals, which are necessary to attract the multibillion-dollar investments needed for companies to create new fields and extract large quantities of oil, Morrow says. "It's very obvious to me that oil companies, including large ones, are following these negotiations closely, looking for a clear legal regime for Iraq." But before they find clarity, they are likely to be looking at some fiery arguments in Iraq's parliament.

Troubles for the Iraq Oil Deal -- Wednesday, Feb. 28, 2007 -- Page 1 -- TIME

Iraq's neighbors agree to Baghdad summit

By QASSIM ABDUL-ZAHRA Associated Press Writer
© 2007 The Associated Press

BAGHDAD, Iraq — Iraq's neighbors, including Iran and Syria, have agreed to join U.S. and British representatives at a regional conference here on the Iraqi security crisis, government officials said Wednesday.

Deputy Foreign Minister Labid Abawi told The Associated Press that Russia and France were studying the invitation, but "I don't see any sign they will refuse."

"Syria, Iran, Saudi Arabia, even the U.S and Britain have informed us they will participate," he said, although Tehran has said publicly it has made no decision. Abawi also said China had agreed to attend.

Abawi said the date would be set within two days. Iraqi state TV said the tentative date was March 10.

Prime Minister Nouri al-Maliki's adviser, Sami al-Askari, also said neighboring countries had agreed to come. Iran has publicly said it is studying the invitation.

"The conference will be important. It will prove that Iraq is politically capable of holding such a conference. It will send a message to the world," Abawi said.

Al-Askari said it would allow countries such as the U.S., Iran and Syria "to sit down together without paying a political price."

Washington's willingness to attend the conference marked a diplomatic turnabout after months of refusing dialogue with Tehran over calming the situation in Iraq.

Secretary of State Condoleezza Rice said Tuesday that the United States would join the meeting and that Washington supported the Iraqi government's invitation to Iran and Syria.The Bush administration waited to embrace the idea until Iraq had made progress on a law governing national distribution of oil revenue.

"We did work with them on the precise timing of the announcement," said State Department spokesman Sean McCormack.

The failure of Iraq's parliament to pass the oil law has been an irritant in U.S.-Iraqi relations. The difficulty is symbolic of Iraq's regional, factional and political divisions, and passage is seen by the United States as a key marker of the government's will and ability to work across those divides.

"We work with them to encourage them to meet those benchmarks that they themselves have set," McCormack said. "This is something that they have been talking about for quite some time, and they thought the timing was right for them to hold the conference and so we encouraged them to move forward with it."Ali Larijani, the head of Iran's Supreme National Security Council, said earlier that Iraqi Foreign Minister Hoshyar Zebari contacted Iranian Foreign Minister Manouchehr Mottaki to discuss the conference. "We are reviewing the proposal," Larijani said, quoted by the state TV Web site.

"We support solving problems of Iraq by all means and we will attend the conference if it is expedient," Larijani said. "We believe Iraq's security is related to all its neighboring countries, and they have to help settle the situation."

Larijani suggested the U.S. presence was not a problem for Iran. Asked by reporters if Iran was running a risk by attending the conference alongside the Americans, he replied, "One should not commit suicide because one is afraid of death" — meaning Iran should not hurt itself just to avoid possible negative results.

Iranian hard-line President Mahmoud Ahmadinejad said on a visit to Sudan that supporting the "legal government of Iraq, its sovereignty and national unity ... are important elements for solving problems" in that country.

The Iranian state IRNA news agency quoted Ahmadinejad as saying that "Americans should amend their policy" in Iraq because the current one is "wrong." A Tehran state radio commentary also said the U.S. should change its Iraq policy if Washington expects the conference to produce a "rational conclusion."

Many Iranians feel resentful about the last major diplomatic dialogue with the United States — when officials from both sides met before the 2001 U.S. invasion of Afghanistan to topple the Taliban, whom Tehran also opposed. Iran backed the invasion — only to see President Bush name the country part of the "axis of evil" later.

The U.S. severed diplomatic relations with Iran in 1979 when Iranian militants occupied the U.S. Embassy in Tehran and held its staff hostage. Washington continues to have diplomatic relations with Syria, including a charge d'affaires at its embassy in Damascus.

The last time the U.S. and Iran had diplomatic contact was in late 2004 at a meeting of 20 nations in the Egyptian resort of Sharm el-Sheik to discuss Iraq's future. Then-Secretary of State Colin Powell and his Iranian counterpart, Kamal Kharrazi, did not hold formal talks, but Egypt sat the two officials next to one another at a dinner. Powell said the two mostly had "polite dinner conversation."

Larijani did not say what level delegate Iran would send if it chose to attend the conference. Rice said Tuesday the gathering would be at a sub-ministerial level, which would be followed by a full ministerial meeting, possibly in early April.

Syria will be represented by Ahmed Arnous, an aide to the foreign minister, a Syrian Foreign Ministry official said, speaking on condition of anonymity because the plans had not yet been formally announced.

Syria believes the U.S. participation in the conference was "a partial step ... in the right direction for comprehensive dialogue with Syria on all issues of the Middle East," the state SANA news agency quoted the Foreign Ministry official as saying.

Iraq's Ahmad Chalabi, an influential Shiite, said the conference was "long overdue" and expressed hope it would help "in building international support" for the Iraqi government.

"The Iraqi people have been waiting for such an international show of support for our struggle against terrorism and to rebuild our country," Chalabi said. "We will never accept Iraq becoming a battleground for other countries, nor will we accept Iraq becoming as base for destabilizing our neighbors."

Iran has said in past months it is willing to meet with the United States to discuss how to calm the violence in Iraq. But tensions have increased dramatically between the two countries recently.

Bush has stepped up accusations that Iran is backing anti-U.S. Shiite militants in Iraq, a number of Iranians in Iraq have been seized by U.S. forces, and the American military presence in the Gulf has been heightened.

At the same time, Washington has led a push for stronger sanctions against Tehran over its nuclear program. The United States accuses Iran of seeking to build nuclear weapons, which Tehran denies. The United Nations has demanded Iran suspend uranium enrichment before any negotiations over its nuclear program can be held, a condition Tehran has rejected.

___

Associated Press Writer Naser Karimi in Tehran, Iran, contributed to this story.

Originally Posted by nikki

Barely two days have passed since Iraq's Prime Minister Nouri al-Maliki hailed the country's new petroleum law as a "solid base for unity of all Iraqis" — a rare boast these days. President Bush has also trumpeted it as proof that Iraq has a viable future. But parliamentarians and Iraq's oil unions have already begun mobilizing against the draft legislation, arguing that it is a desperate attempt by al-Maliki's government to satisfy Western demands, which could damage Iraq's economic future and speed the country's ultimate disintegration.

The law is a dramatic break from the past. Foreign oil companies will have a stake in Iraq's vast oil wealth for the first time since 1972, when Iraq nationalized the oil industry. In theory, that could finally fix Iraq's shambolic oil sector, whose infrastructure has been crippled by decades of wars and sanctions. Production these days hovers around 2 million barrels a day, a big drop from Iraq's prewar peak of more than 3 million barrels a day.

But political infighting could yet scuttle the deal once it goes to a vote in parliament, perhaps in early March, say the law's detractors. "The feeling is that the law is focused very much on sectarianism," says Saleh al-Mutlaq, who heads the National Dialogue Front, a small secular party with 11 seats in parliament. "It divides the country and the wealth into groups — Kurds, Sunnis, Shi'ites," he said on the phone from Amman on Tuesday.

Some Sunni groups fear that their less oil-rich areas could lose out when Iraq's potentially huge wealth is distributed. The ability of regions to sign their own contracts was bitterly argued for months by negotiators from Kurdistan, where there is deep distrust of Baghdad's politicians. Under the law, companies can deal with both the central Ministry of Oil, as well as regional entities. But that concession has provoked intense anxiety that Iraq could break apart, if some regions — or perhaps even powerful Shi'ite clans in southern Iraq — calculate that they can finance autonomous states from their massive oil deposits.

Billions of dollars — and Iraq's future — are at stake. Virtually all the revenues Iraq has to rebuild its shattered economy will come from its mammoth energy deposits — some of the world's biggest untapped reserves — of about 115 billion barrels of oil and about 110 trillion cubic feet of natural gas. In addition, Iraq's major creditors have made clear they expect a working oil industry, as a precondition for forgiving billions of dollars in Iraqi debt incurred largely by Saddam Hussein's wars against Iran and Kuwait and by his mega-splurging at home.

Under the new law, agreed on Monday by Iraq's cabinet, foreign oil companies will be allowed to cut long-term exploration and development deals with the government for 20 years, renewable for a further five years. Companies willing to operate in a country with high physical risks — insurgents regularly blow up pipelines and kill contractors — will be allowed to export their oil after paying the government a minimum 12.5% royalty, although there are usually also cash signing bonuses to the government, and most "profit oil," extracted after operating costs are met, would likely go to Baghdad. Regional governments — only Kurdistan has one right now — can sign their own contracts under the law, a dizzying change from decades when Saddam dictated the terms and stifled oil production in Kurdistan. A Baghdad-based Federal Council on Oil & Gas will be formed; it will have 60 days to appoint a team to arbitrate a contract, if it has strong concerns.

Despite the grumbling from politicians, it is still unclear whether opposition to the law is strong enough to kill it. Among the parliamentarians arguing against the law are Moqtada al-Sadr's bloc, which fears that foreign oil companies will move into Iraq in force, and stay long after U.S. soldiers have left. But logistically they will have to race back to Baghdad to vote against it. Many parliamentarians, like al-Mutlaq, spend much of their time outside Iraq — al-Sadr himself is frequently in Iran. "I'm going back for this very reason," al-Mutlaq says. "We cannot yet figure out how many people will stand against it." He says he is certain he will find allies among his colleagues, who he says believe that the law is geared to the needs of Western oil companies rather than Iraqis. There has been no public hearing on the draft, whose details have largely been kept secret. Iraqi lawmakers fumed last July when U.S. Energy Secretary Samuel Bodman discussed the draft during a trip to the region, "when hardly a single parliamentarian had seen it," says Kamil Mahdi, an Iraqi who is senior lecturer in Middle East economics at the University of Exeter in Britain, and who spent Tuesday discussing the law by phone with several parliamentarians. He said several believe that the government should wait until the war ends before locking Iraq into long-term deals with foreigners, he says. "This draft is totally out of synch with any notion of the interests of Iraq," he says.

The rumblings of opposition go beyond parliament to the oil fields themselves. Iraq's biggest oil unions, which could potentially disrupt production, have been among the law's strongest opponents. Hassan Jum'ah Awwad Al-Asadi, head of Iraq's Federation of Oil Unions, the largest union group, says he intends to mobilize his 23,000 or so members against the draft. "We want a new, different law, which will be in the interests of Iraqis," he said by phone from Basra on Wednesday. "If there is no solution we can stop production, stop exports." In a more threatening tone, he told union members at a conference on the law in Basra in early February: "We strongly warn all the foreign companies and foreign capital in the form of American companies against coming into our lands under the guise of production-sharing agreements."

The view inside the negotiating room, through months of wrangling over the law, was starkly different. At least one person who sat through the talks said he was amazed to find that U.S. officials and diplomats appeared to lie low, perhaps because they were overwhelmed by fighting the war. "The U.S. was so afraid to be seen to be meddling in Iraq's oil that they took a backseat," says Jonathan Morrow, legal adviser to the Kurdistan Regional Government and a former senior legal adviser to the U.S. Institute of Peace in Washington. Rather than simply satisfying oil companies, the new law "offers oil companies risk and reward" deals, which are necessary to attract the multibillion-dollar investments needed for companies to create new fields and extract large quantities of oil, Morrow says. "It's very obvious to me that oil companies, including large ones, are following these negotiations closely, looking for a clear legal regime for Iraq." But before they find clarity, they are likely to be looking at some fiery arguments in Iraq's parliament.

Troubles for the Iraq Oil Deal -- Wednesday, Feb. 28, 2007 -- Page 1 -- TIME

I sure hope this isn't another set back!!Get on with it already!!Any thoughts?
Sarah!!

it'll all pass, in due time.......with Dubya & 5 Deferrment Dick & Kind-a-Sleezy Rice at the helm....Bush and Cheney will get their oily cake - and they will eat it, too (or be drenched in its glory). Mission accomplished: permanent, sprawling military bases on the eastern flank of the Arab nation and control of some of largest, untapped oil wealth on the planet - a key geostrategic goal of the New American Century..... Now it's time to move east, (get yer Rials here folks) bomb Iran, force regime change and - what else? - force PSAs down their Persian throats.....sorry for the rant....jmo

it'll all pass, in due time.......with Dubya & 5 Deferrment Dick & Kind-a-Sleezy Rice at the helm....Bush and Cheney will get their oily cake - and they will eat it, too (or be drenched in its glory). Mission accomplished: permanent, sprawling military bases on the eastern flank of the Arab nation and control of some of largest, untapped oil wealth on the planet - a key geostrategic goal of the New American Century..... Now it's time to move east, (get yer Rials here folks) bomb Iran, force regime change and - what else? - force PSAs down their Persian throats.....sorry for the rant....jmo

_________________

LOL!!!!!!!! _

what did chappelle call her? ----------- heheh

Originally Posted by Mike5200

I agree and would hope that this is not really happening-on the other hand IF ITS NOT TRUE what would be the motivation for someone to write this? Shame the Iraqi Govt.?(doubt thats even possible) Stir the pot for all Dinar investors?(our own forums do that) Can anyone out there that have sources with boots on ground verify about the banks?

Good point,

I read this ealier and put out an inquiry to my Kurdish contacts and they could not confirm same in Kurdistan region, so maybe it is happening in Baghdad, we shall see.

Good luck to all, MIke

Khalilzad welcomed the ratification by the Iraqi government to S44 n the national oil and gas

Economic news- Source : KUNA-28 / 02 / 2007

Khalilzad welcomed the ratification by the Iraqi government to S44 n the national oil and gas

The American ambassador in Iraq, Zalmay Khalilzad, MI because the Iraqi government to the oil and gas as " an important political achievement "and expressed the hope that the longer this Alcan won "the main pillar of the National Pact, which was adopted by the Iraqis.

He said in a statement that "leaders who represent all segments of a the Iraqi society proved they are capable of work that Cries to solve the difficult issues of vital importance Hello national. "

He said it is "possible to achieve the National Charter (of interests national e) if completed, will similar solutions on the felt before the eradication of the Baath and amending the constitution ".

He praised the American ambassador to the Committee on Energy told the Council of Ministers headed by Deputy Prime Minister Barham Salih and with the participation of ministers of oil, planning and finance and justice electricity and Governor of the Central Bank and others and said that s Unwin oil, which contains firmly committed to participate P j revenue among regions and provinces "confirms reaffirms that the oil and gas resources belong to all the people Iraq. Under this law, all proceeds from sales of oil "will go to the expense of a national one."


He also pointed out that the representation of all regions and recognized in Fadat in the Federal Council of oil and gas, which is a of the major industry energy policy in the country..The Iraqi governorates receive shares directly from Abu And therefore there will be increasing local control financial resources.

The law of international standards for transparency including the public disclosure requirements of the contracts and the returns Mairafqaha payments also defines the role of the Ministry of Oil as organized first as is the case in general in the pain other attended.

The draft legislation this legal framework to allow international investment in the oil and gas sectors in the Iraq.

Khalilzad said he "will be on the House Iraqi ratification of the draft legislation this when he returns from waned e clearance. "

Because of the representation of parliamentary blocs in the President a the ministers, there has very high expectations to become a draft legislation to this law the country's oil will not be impaired Alberlm that discussion.

And through the American ambassador expressed his belief that the leaders of Iraq they know that achieving progress on the political level and they take difficult decisions, it was essential.

It was of the view that this is the first time since 2003 that followed Afterward which all segments of Iraqi society President on T. Cheria important this.


Translated version of http://www.iraqdirectory.com/DisplayNewsAr.aspx?id=3291

RE: Handout.

Believe me, I want the reval with a handout... but isn't this the handout for money owed in oct. nov. dec., etc. Regretably, the GOI probably has to pay under the old terms... though immediately tragic, this could mean a higher reval, since more cash would be coming back to the banks on cashout.. and then reval... those who saved will obviously do better, but the instant gratification will be purged at a lower rate...

Then a higher reval and the slaries and purchase power gets better for all.. though there would be some regret of would of / could of / should of.. personally I want Iraqis to benefit first we get paid, but if the and out and no major reval that puts real money to the common iraqi... failure to do so puts all of the foundation in oil companies and foreign investment, and tehy will pay themselves first before the iraqi nation.

Linus

Originally Posted by PAn8tv

Hey H2O welcome back! I think you are correct on still needing a signature, how long should that take?...If Condi makes a phone call I bet it gets done before May, regardless if they are on another break, holiday or whatever you want to call it. I copied this from my post and the highlighted part is intriguing....It is expected to introduce this project, approved by the Iraqi government Monday, the House of Representatives after the completion of spring vacation told becomes effective, if approved, the end of May (May) painless before. A member of the oil, gas and natural resources in the Parliament Osama Alnjevi that <will be ratified in a parliament quickly on the project because of differences based e-political blocs on oil investment>.

Could that mean to make it happen before May, I think that is a good possibility.

thanks and its good to be back ....... !

Originally Posted by nikki

Barely two days have passed since Iraq's Prime Minister Nouri al-Maliki hailed the country's new petroleum law as a "solid base for unity of all Iraqis" — a rare boast these days. President Bush has also trumpeted it as proof that Iraq has a viable future. But parliamentarians and Iraq's oil unions have already begun mobilizing against the draft legislation, arguing that it is a desperate attempt by al-Maliki's government to satisfy Western demands, which could damage Iraq's economic future and speed the country's ultimate disintegration.

The law is a dramatic break from the past. Foreign oil companies will have a stake in Iraq's vast oil wealth for the first time since 1972, when Iraq nationalized the oil industry. In theory, that could finally fix Iraq's shambolic oil sector, whose infrastructure has been crippled by decades of wars and sanctions. Production these days hovers around 2 million barrels a day, a big drop from Iraq's prewar peak of more than 3 million barrels a day.

But political infighting could yet scuttle the deal once it goes to a vote in parliament, perhaps in early March, say the law's detractors. "The feeling is that the law is focused very much on sectarianism," says Saleh al-Mutlaq, who heads the National Dialogue Front, a small secular party with 11 seats in parliament. "It divides the country and the wealth into groups — Kurds, Sunnis, Shi'ites," he said on the phone from Amman on Tuesday.

Some Sunni groups fear that their less oil-rich areas could lose out when Iraq's potentially huge wealth is distributed. The ability of regions to sign their own contracts was bitterly argued for months by negotiators from Kurdistan, where there is deep distrust of Baghdad's politicians. Under the law, companies can deal with both the central Ministry of Oil, as well as regional entities. But that concession has provoked intense anxiety that Iraq could break apart, if some regions — or perhaps even powerful Shi'ite clans in southern Iraq — calculate that they can finance autonomous states from their massive oil deposits.

Billions of dollars — and Iraq's future — are at stake. Virtually all the revenues Iraq has to rebuild its shattered economy will come from its mammoth energy deposits — some of the world's biggest untapped reserves — of about 115 billion barrels of oil and about 110 trillion cubic feet of natural gas. In addition, Iraq's major creditors have made clear they expect a working oil industry, as a precondition for forgiving billions of dollars in Iraqi debt incurred largely by Saddam Hussein's wars against Iran and Kuwait and by his mega-splurging at home.

Under the new law, agreed on Monday by Iraq's cabinet, foreign oil companies will be allowed to cut long-term exploration and development deals with the government for 20 years, renewable for a further five years. Companies willing to operate in a country with high physical risks — insurgents regularly blow up pipelines and kill contractors — will be allowed to export their oil after paying the government a minimum 12.5% royalty, although there are usually also cash signing bonuses to the government, and most "profit oil," extracted after operating costs are met, would likely go to Baghdad. Regional governments — only Kurdistan has one right now — can sign their own contracts under the law, a dizzying change from decades when Saddam dictated the terms and stifled oil production in Kurdistan. A Baghdad-based Federal Council on Oil & Gas will be formed; it will have 60 days to appoint a team to arbitrate a contract, if it has strong concerns.

Despite the grumbling from politicians, it is still unclear whether opposition to the law is strong enough to kill it. Among the parliamentarians arguing against the law are Moqtada al-Sadr's bloc, which fears that foreign oil companies will move into Iraq in force, and stay long after U.S. soldiers have left. But logistically they will have to race back to Baghdad to vote against it. Many parliamentarians, like al-Mutlaq, spend much of their time outside Iraq — al-Sadr himself is frequently in Iran. "I'm going back for this very reason," al-Mutlaq says. "We cannot yet figure out how many people will stand against it." He says he is certain he will find allies among his colleagues, who he says believe that the law is geared to the needs of Western oil companies rather than Iraqis. There has been no public hearing on the draft, whose details have largely been kept secret. Iraqi lawmakers fumed last July when U.S. Energy Secretary Samuel Bodman discussed the draft during a trip to the region, "when hardly a single parliamentarian had seen it," says Kamil Mahdi, an Iraqi who is senior lecturer in Middle East economics at the University of Exeter in Britain, and who spent Tuesday discussing the law by phone with several parliamentarians. He said several believe that the government should wait until the war ends before locking Iraq into long-term deals with foreigners, he says. "This draft is totally out of synch with any notion of the interests of Iraq," he says.

The rumblings of opposition go beyond parliament to the oil fields themselves. Iraq's biggest oil unions, which could potentially disrupt production, have been among the law's strongest opponents. Hassan Jum'ah Awwad Al-Asadi, head of Iraq's Federation of Oil Unions, the largest union group, says he intends to mobilize his 23,000 or so members against the draft. "We want a new, different law, which will be in the interests of Iraqis," he said by phone from Basra on Wednesday. "If there is no solution we can stop production, stop exports." In a more threatening tone, he told union members at a conference on the law in Basra in early February: "We strongly warn all the foreign companies and foreign capital in the form of American companies against coming into our lands under the guise of production-sharing agreements."

The view inside the negotiating room, through months of wrangling over the law, was starkly different. At least one person who sat through the talks said he was amazed to find that U.S. officials and diplomats appeared to lie low, perhaps because they were overwhelmed by fighting the war. "The U.S. was so afraid to be seen to be meddling in Iraq's oil that they took a backseat," says Jonathan Morrow, legal adviser to the Kurdistan Regional Government and a former senior legal adviser to the U.S. Institute of Peace in Washington. Rather than simply satisfying oil companies, the new law "offers oil companies risk and reward" deals, which are necessary to attract the multibillion-dollar investments needed for companies to create new fields and extract large quantities of oil, Morrow says. "It's very obvious to me that oil companies, including large ones, are following these negotiations closely, looking for a clear legal regime for Iraq." But before they find clarity, they are likely to be looking at some fiery arguments in Iraq's parliament.

Troubles for the Iraq Oil Deal -- Wednesday, Feb. 28, 2007 -- Page 1 -- TIME

"TIME in partnership with CNN", I'll take that article with a grain of salt!!