There is no chance that INOC draft law would be voted by parliament before the draft oil and gas law is legislated, according to Oil Minister Hussein al-Shahristani. Why? Because there is close linkage between the two laws as well as two other laws pending legislation; the oil ministry restructuring law and the revenue sharing law, “without which the state company would be paralyzed.”
And that’s not all. There is still disagreement among political parties on at least two of the four laws proposed, he revealed this week in an interview with a local Iraqi newspaper.
INOC law cannot be legislated without the oil and gas law because some of its decisions have to be approved by a federal oil and gas council, and the latter will only be established once the oil and gas law comes into effect. “As long as the council is not established, INOC will not function.”
The oil ministry restructuring law is also a pre-requisite in order for the three subsidiaries, North Oil Co, South Oil Co and Missan Oil Co, to be transferred from ministry ownership to that of the new holding company. Until a law defining the role and functions of the ministry and regulating the transfer of the three companies is adopted, INOC is just a shell without much content.
Differences with the Kurds over the oil and gas law are widely known. But what is not known is Kurdish Deputy Prime Minister Barham Saleh’s objections to one clause in the revenue sharing law which has so far upheld its endorsement by the cabinet, according to Shahristani. While there has been agreement within the Iraqi council of ministers over the share of the Kurdish region of the national budget, disagreement persisted over how much of the budget should be allocated to national and strategic projects before revenues are split among regions and governorates, once the sovereign expenditures for defense, foreign affairs, and national security are deducted.
According to Shahristani, “some ministers recommended that 20% of the revenues be allocated to national projects such as the Great Basrah port, the north-south national railway and a dam to be built in northern Iraq. Saleh suggested just 5% in order to maximize the other allocations to the regions. Most ministers were in favor of 10%. No agreement was reached and the council of ministers is yet to reach consensus over this percentage” in order for the revenue sharing law to be approved and sent to parliament.
“These are the reasons why INOC law is delayed. The oil and gas law is to be blamed, not the ministry….The four laws can only be applied as a package,” the minister said.
Shahristani’s Kurdish antagonists should feel happy that the two have finally found common ground over one issue, and just as coalition negotiations and deal-making for the upcoming national legislative elections are in full swing.
What you say makes an awful lot of sense.
The only thing that might be worrying in the long run is the fairly meagre condition of the central Iraqi state. Disputes with powerful regions, (one with a clear tendency to independence), will probably make it quite difficult to run policies of general national interest, including oil. The reason is of course the “minimalist” design of the Iraqi constitution that seems to have left little room for coordination by the Central Government.
We’ll have to wait and see, but…