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'Allawi Bloc Says Oil & Gas Licences Are Illegal.

The secular bloc, al-Iraqiya, led by ex-PM Iyad Allawi (a secular Shi'ite strongly backed by Iraq's Sunni Arab minority), last week said all the oil and natural-gas development contracts awarded by the out-going government of Nuri al-Maleki (a Shi'ite Islamist backed by Iran) were illegal and may be cancelled. Al-'Iraqiya, which won the largest number of seats - 92 - in the March 7 legislative elections, said it "strongly condemns the out-going government's actions to offer licence rounds with long-term contracts and over-stepping its constitutional mandates".

The bloc, with Allawi likely to become the man in charge of the petroleum sector as head of a special council in parallel with the cabinet, said fields' auctions were also "considered illegal in view of the current constitutional and political vacuum engulfing the country, which exposes the Oil Ministry and all parties concerned to legal questioning and which may...lead to the cancellation of these contracts". It said the TSAs were signed "with no reference to current laws such as Law 97 of 1967, which requires the consent of the Iraqi parliament in the absence of a Federal Oil and Gas Law".

Parliamentary elections in Iraq on March 7 produced no clear winner, and political parties, including the rival blocs led by Allawi and Maleki, have been struggling since then to form a government. Maleki's out-going government has said repeatedly that signed petroleum contracts would not be cancelled. The power-struggle between these two blocs is getting more and more serious as Iran is trying to control Iraq as the US is preparing to leave the country. Maleki is also being accused of having committed war-crimes against the Sunnis (see sbme5IrqAbusesNov1-10).

The latest auction on Oct. 20 involved three gas fields won mostly by relatively smaller firms. The state-owned Turkiye Petrolleri (TPAO) and KazMunaiGaz EP of Kazakhstan were among firms which secured rights to develop the three gas fields - Akkas in the western province of Anbar, Mansouriya in the north-eastern province of Diyala and Siba in the southern province of Basra. But, at the same time, Iraq has increased its estimate of proven oil reserves and has begun lobbying for a major OPEC quota, which has caused it to be in fierce competition with Iran (as explained in ood4IrqOPEC-Oct25-10).

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Publication:APS Review Gas Market Trends
Geographic Code:7IRAN
Date:Nov 1, 2010
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