The draft law makes a national Iraqi oil company the ultimate authority in the formulation of policies, orders on procedures for drilling and production and in the signing of deals with investors. The council heading the Iraqi National Oil Company (or INOC) would have control over all the oil fields that are already producing crude.
This means the council at the top of the INOC gets a lot more authority – under the old version of the law, the council could only draw up policies and issue instructions.
The INOC would also get authority over the bidding for almost all of Iraq’s oil and gas fields; previously they were only able to conduct auctions on new – read: undiscovered, undeveloped – fields.
The new draft of the law also eliminates an important clause that said that the INOC’s authority must include representation from Shiite Muslim parties, Sunni Muslim parties and from the Kurdish sector. It also reserves a seat on the council for the deputy prime minister for energy – currently this is Hussein al-Shahristani, well known as a close ally of al-Maliki’s.
None of this has gone down well with Kurdish politicians, both in Baghdad and in their own semi-autonomous state of Iraqi Kurdistan. Who owns the oil fields inside the Kurdish region, which has its own government and its own legislation, has long been a contentious issue between the Arab government in Baghdad and the Kurdish one in Erbil.
In fact in 2007, the Kurdish regional government came up with its own oil and gas law and then set about signing 41 production contracts, according to information from the Kurdish Ministry of Natural Resources, with a number of foreign firms. Baghdad has described those contracts as illegal and has accused the regional Kurdish government of a lack of transparency while making the deals.
In protest, the Kurds shut down production at their oil fields from late 2009 until early 2011. And after the federal oil and gas legislation was pushed through a few weeks ago, they again halted production at their fields.
This 18 issues Maliki agreed upon need also to be implemented! Agree is one thing, but agree without be proved in practice is a total different matter. Maliki is not to trust!
How does all of this effect the revaluation of the dinar?