Iraqi Parliament: Oil Law spurs debate on role of US Corporations

The Christian Science Monitor focuses on the Iraq Oil Law with two articles today pointing to the controversial role of US oil companies and production sharing agreements in the legislation. First, Howard LaFranchi offers this report on the debate within the Iraqi Parliament on the terms and timing of the oil law, or "hydrocarbon law," that the US Congress has set as a benchmark for progress in Iraq:

"Two issues remain of the highest importance to the Kurdish side: how the oil revenues will be shared and how new investment agreements will be signed with foreign companies," says Fryad Rwandzi, a Kurdish member of parliament. "The Kurdish delegation will address that ... and if the results are satisfactory, we could have passage ... soon," perhaps by mid-June.

But other lawmakers insist it will take more time – in part because the months of debate and media attention have exposed the law's shortcomings and provided fodder for opposition from all sides. Abdel Hadi al-Hassani, a Shiite member of parliament from a branch of Mr. Maliki's Dawa Party, says that proposed "production-sharing agreements" with foreign oil firms are so tarnished that they will have to be changed.

Meanwhile, Gail Russell Chaddick reports on the debate within Congress over whether the terms of the production sharing agreements in the Iraqi oil law have been rigged to favor United States oil corporations in How will Iraq share the Oil?:

"While we can't confirm it, there are enough reports out there that appear to indicate that undue, unfair preference and the influence of our oil companies are part of the Iraqi hydrocarbon law, and if that is true, that is not correct," says Rep. Joe Sestak (D) of Pennsylvania, a former admiral and defense adviser to the Clinton administration. "The aim of benchmarks is to help the process along, but we need benchmarks that are appropriate for the Iraqis and the Americans – not just our economy but our ideals."

Issam Al Chalabi, a former Iraqi oil minister, gets to the heart of the matter:

"The actual draft law has nothing to do with sharing the oil revenue," says former Iraqi oil minister Issam Al Chalabi, in a phone interview from Amman, Jordan. The law aims to set a framework for investment by outside oil companies, including favorable production-sharing agreements that are typically used to reward companies for taking on risk, he says.

"We know the oil is there. Geological studies have been made for decades on these oil fields, so why would we let them [international firms] have a share of the oil?" he adds. "Iraqis will say this is solid proof that Americans have staged the war ... because of this law."

The two articles in tandem form a must-read about a central issue in the debate over the war in Iraq and current Congressional measures for withdrawal: the role and interests of US oil companies in the Iraqi oil law, and, in particular, the terms of the production sharing agreements.

Tags: Iraq Oil Production Sharing Agreements Hydrocarbon Law