IRAQ - Kurdish Opposition.

Reuters on April 30 quoted KRG Natural Resources Minister Ashti Hawrami as saying the Kurdish authorities would try to block the law in parliament, raising the stakes in a row with the central government over control of the petroleum reserves. Thus the KRG is on a collision course with Baghdad over the US-backed draft at a time when Iraq is engulfed by sectarian violence (see this week's APS Diplomat).

The threat to fight the bill came just days after the Oil Ministry in Baghdad warned regions against signing contracts until the law was passed. Dr. Hawrami said: "These annexes are unconstitutional and will not be supported by the Kurdish Regional Government in the federal parliament". He was referring to annexes which he said would wrest oilfields from regional governments and place them under INOC.

The Kurds hold 58 of the 275 parliament seats - not enough to defeat the move on their own. But Kurdish objections could delay passage of the bill, whose ratification has been strongly urged by the White House as a major step towards national reconciliation.

In February, the Kurdish bloc agreed to support the bill, which would distribute oil revenues among Iraq's 18 provinces - with the country's main communities being the Shi'ite Arabs (about 60% of the population of some 26m), Sunni Arabs, and Kurds.

The draft was endorsed by the Iraqi cabinet on Feb. 26, but without some technical provisions. KRG spokesman Khaled Saleh on April 30 said those put almost 93% of Iraq's oil reserves under INOC's control. He claimed that would give Baghdad a stronger role in deciding oil contracts than set out in the draft, which gave the KRG the right to negotiate and sign preliminary deals with oil companies. Saleh said: "We are not going to support" the provisions. Some Sunni MPs also have raised objections, saying the law would give IOCs too great a role in the country's petroleum industry.

The draft is vital to securing IOC money to boost oil output and rebuild its economy. But officials from Iraq's central government and Kurdistan have clashed over the annexes, raising the prospect of more delays which dogged the lengthy drafting of the legislation.

Hawrami on April 29 repeated a threat that the KRG would implement its own oil laws if no agreement was reached on the dispute over the annexes. Hawrami said: "The annexes must recognise that the KRG has already allocated exploration and development blocks in the Kurdistan region under PSAs pursuant to the Iraqi constitution".

In a reference to Saddam, blamed for killing tens of thousands of Kurds during a scorched-earth campaign in the 1980s, Hawrami said INOC would be a return to "old regime methods", adding: "The concentration of power in the hands of INOC will represent a return to method of petroleum management of previous Iraqi regimes, where centralised oil power was...used to fund violent campaigns by elites against neighbouring countries and against our own Iraqi citizens".

Officials from the central government and the KRG have said they would meet to iron out the disputes. But Hawrami said sending a delegation to Baghdad was "futile". A US government official in Baghdad on April 29 said Washington was confident the law would pass, adding: "I think that the government is committed to getting the oil law through. I know various bodies have expressed concern about the...law given the stakes involved. The government has a majority in parliament".