Baghdad Mulls Creating Oil Fund Abroad.

Kurdish Regional Government (KRG) Minister of Natural Resources Ashti Hawrami in March said Baghdad was considering creation of an oil revenue fund to be held outside the country to minimise the chances of corruption, as part of the country's hydrocarbon law. He said the law called for a revenue sharing commission, as required by Iraq's constitution. The fund would be audited by an outside party to ensure Iraq's oil revenues are not misused or misallocated. The commission would set aside 5% of all Iraqi oil revenues for future generations, in addition to distributing the country's oil moneys based on mechanisms currently being negotiated by Iraq's various political groups.

Hawrami said the KRG would have no reservations about opening its books to international scrutiny to ensure they met the highest standards, adding: "We have no problem allowing the international community to look at our books". He said the KRG was to publish details of the existing oil contracts it had with foreign companies in a move to boost public confidence. He said: "We will publish the contracts so people can see we have nothing to hide", adding: "People want to frighten the Iraqi people that their oil will be taken by foreign oil companies. This is simply not the case".

To counter concerns that the contracts were too generous to the companies, Hawrami said foreign firms operating in the north could expect net returns of 7-13%, depending on the project and degree of risk. Hawrami said Kirkuk will remain under Baghdad's management, irrespective of the outcome of a planned referendum this year that will determine whether Kirkuk becomes administered by the KRG.