Biden presses Iraqi leaders for progress on key new laws

US Vice President Joe Biden held talks in the Kurdish regional capital of Arbil on Thursday to push Iraqi leaders for progress on stalled legislation ahead of parliamentary elections in January.

A long-awaited hydrocarbons law, intended to open up the Iraqi oil and gas sector and establish a framework for sharing revenues, remains some way off and jockeying ahead of the January polls has hampered movement, Biden said.

He said earlier that the upcoming elections were "critical to Iraq's future", and also met with American soldiers at a military base outside Baghdad, posing for pictures with his arms around their shoulders.

"In truth, some of the more difficult problems are more difficult to solve in an elections cycle," Biden said while in Baghdad.

He raised the issue of the oil law in his talks in the capital with senior Iraqi leaders, including Prime Minister Nuri al-Maliki.

He was to deliver the same message in meetings with Kurdish leaders in the north of the country, where he arrived Thursday afternoon, a senior US official said.

Early passage of the legislation was "in the best interest of the country," added the official, asking not to be named.

Biden also urged Iraq to offer more generous terms at its next auction for oil concessions.

He "made clear that the next round of bidding on oil concessions should be made on more generous terms to attract more outside interest," the official said.

"Only one of eight deals up for bidding earlier this year was taken," he said, referring to Iraq's first tender offer in four decades last June that saw investors snub all but one of the contracts on offer.

The official said that "even one other deal would mean 50 to 60 billion dollars in additional investment in Iraq, 600 million dollars in additional annual revenue, and tens of thousands of additional jobs.

"Ultimately, in our judgment, it's in the interest of every Iraqi to accept a smaller piece of a much bigger pie."

The second round of bidding for Iraq's oil contracts is due to take place in the first half of December.

In June, British energy giant BP and China's CNPC International Ltd were the only companies to win a bid. They accepted two dollars per barrel to work jointly in the giant Rumaila oil field in southern Iraq.

In an interview with CNN television, Biden praised the progress that he said was being made in talks between the Kurdish regional authorities and the central government in Baghdad on longstanding Kurdish claims to expand their autonomous region in the north that have sparked tensions with non-Kurds.

"I think they're... making some real progress," he said in an interview with the network's Pentagon correspondent Chris Lawrence.

"So I'm feeling, quite frankly, I think the tensions have lessened between the Arabs and the Kurds."

After his talks with Kurdish regional president Massoud Barzani, Biden said he believed the Kurdish leader was "negotiating in good faith with the central government".

"We know these are difficult issues. If they weren't, they would have been resolved a long time ago," he said.

Barzani reiterated the Kurds' commitment to the Iraqi constitution which provides for a referendum on the future of oil-rich Kirkuk province, a historically majority Kurdish area that they have long demanded be incorporated in their autonomous region in the north.

"We reaffirmed our commitment to the constitution," the Kurdish leader said.