WASHINGTON - Iraq’s government has resolved a dispute over the sharing of oil revenues across the country but differences remain over who will hand out lucrative oil contracts, a senior Iraqi official said on Tuesday.Deputy Prime Minister Barham Salih said the contentious issue of oil revenues was resolved during recent negotiations for a new law to regulate Iraq’s oil and gas industry. ”Remarkably we have been able to settle oil revenues,” said Salih in a video conference from Baghdad with reporters based in Washington.
Salih, the most senior ethnic Kurd in the cabinet, did not provide details on how oil revenues would be distributed or which areas would get the most money. “We have the danger of oil turning into a divisive issue that everyone will fight over. By agreeing to share the revenue we have the potential of turning oil into a unifying element in Iraq society,” Salih said.
There has been some dispute, particularly among those who live in the oil-rich regions of the north and south of Iraq, over who controls oil fields and their revenues. The semi-autonomous Kurdish regional government in the north has signed oil deals with foreign companies, bypassing the central government and raising fears such agreements could fuel tensions that have pushed Iraq close to civil war.
The Sunni Arab community, which is concentrated in resource-poor,
Salih said there was still a dispute over who should be responsible for handing out new oil contracts that will develop Iraq’s vast oil fields. “I believe we will be able to bridge the gap,” he said.
Iraq straddles the worldÂ’s third-largest oil reserves but the sector has been undermined by decades of underinvestment, war, sanctions and mismanagement.
| Decades? You mean it started before April, 2003? Who knew? |
Iraq wants up to $20 billion in investment to boost its oil production but multinationals eyeing IraqÂ’s oil fields are waiting until a new investment code with a legal and regulatory framework is in place. IraqÂ’s oil sector has been hit by repeated attacks and many foreign oil companies are also nervous to invest because of the dangers to their staff. Salih, who argues that restored prosperity will rein in the violence, said an improved investment environment would have a dramatic impact on boosting oil production.
Currently Iraq exports 1.7 million to 1.8 million barrels per day (bpd) of oil and Salih said production was about 2.2 million to 2.5 million bpd, with plans to double that by 2010 to 4.3 million bpd. By 2012, he anticipated restructuring and investment would push up production to 6 million bpd. “If we get the politics right and the right type of investment environment we will be able to reach those targets a lot earlier,” said Salih.
Pre-war output was just under 3 million bpd and exports were around 2 million bpd.