Time to Move on: Iraq's Oil & Gas Impasse Explained

The two parties are divided on what the entirely new body – the Federal Oil and Gas Council – would and would not be able to do.

Without going into major detail, the parliamentary committee wants to give the federal council more teeth, allowing it to have the final say on contracting, that is, which oil companies qualify for work in Iraq. It also wants the federal council’s members to include members from itself, the parliamentary committee. The parliamentary committee wants to ensure that the executive branch of the government does not get to make the final decision on oil and gas policy. It wants the federal council to be the most powerful body in this area and this would leave Iraq’s Ministry of Oil in a much weaker position.

The cabinet-based committee meanwhile, has quite different ideas and wants the federal council to have more limited powers.

What the parliamentary committee’s desires add up to is a much more political process. The wrangling will continue and unless there is always some unanimous decision among the biggest groups, no decisions will be made. That is, business as usual. It’s worth noting that this way of legislating currently suits the Kurdish politicians, who are seen as king makers in Iraq. The two major political groups are almost equal in terms of seats in the Iraqi parliament and whoever can bring the Kurds on side wins on the day.

One thing that the parliamentary committee does not mention though is which authority the federal council would be answerable to. Which is why it seems likely that, if they get their way, then a lot of the decision making would take place behind closed doors, debated by the three main political blocs in private.

Interestingly both versions of the oil and gas law appear to try and minimise the Iraqi Parliament’s role in the oil sector. This means that a lot of the decision making in this area will be done behind closed doors.

The Ministry of Oil

The draft of Iraq’s oil and gas law that the parliamentary committee supports would strip away much of the Ministry of Oil’s powers and turn it into a regulatory body, rather than a decision maker. It would still be in charge of important processes – such as auditing, regulations, representation within OPEC (the Organization of the Petroleum Exporting Countries) – but its work would have to be approved by the Federal Oil and Gas Council.