Iraq oil wealth distribution planned

Iraqi legislation intended to resolve the politically charged question of distributing the country's oil wealth is nearing completion, the chairman of a panel drafting the law said Saturday.

The distribution of oil revenues, the mainstay of Iraq's economy, is at the heart of some of Iraq's most contentious political issues, including the push by Shiite leaders to allow the oil-rich south of Iraq to set up a self-rule region a similar to a Kurdish one in the north.

"We have reached important agreements. I cannot put a timeframe on when it will be ready, but we are very keen on achieving that as soon as possible," Deputy Prime Minister Barham Saleh, a Kurd who chairs the committee, said. "We hope that we will reach a comprehensive agreement that will enhance the oil sector and make oil a unifying factor to all Iraqis."

He said, however, that key issues still need to be resolved, including "the administration of the oil sector, deals and contracts."

Underlining the sensitivities involved, Nechirvan Barzani, the Kurdish region's prime minister, said Thursday that talks he held with the Baghdad government this month failed to produce an agreement on his demands for control of oil resources in the region.

"We demand that the signing of contracts to develop oil fields in Kurdistan should be handled by the Kurdistan region," he said, according to Dow Jones Newswires.

Iraq is believed to produce around 2.2 million barrels of oil a day and exports about 1.5 million, well below prewar levels. Insurgent attacks have frequently targeted oil facilities and pipelines, disrupting exports and disrupting efforts to modernize the industry.

The Iraq Study Group recommended that the U.S. government work with Iraqis to come up with a clear, legal framework for oil investment. It also suggested that the U.S. military work with Iraqi and private security forces to protect oil facilities.

Oil Ministry Spokesman Assem Jihad said the government hoped that the oil legislation would encourage foreign investment in the oil sector, which has struggled since the imposition of sweeping U.N. sanctions on Iraq following its 1990 invasion of Kuwait. The measure must be approved by the Cabinet and parliament.