Letter from Iraqi Oil Experts to Parliament

THE PRESIDENT AND MEMBERS OF THE IRAQI COUNCIL OF REPRESENTATIVES

During the last six months, the public opinion, including US ( oil experts and men of law and economics ) were occupied with the procedures and events that accompanied the oil and gas law; many symposiums were held, the most prominent of which may be the symposium that was held by the oil experts in Amman on 17/2/2007 which produced a number of comments and recommendations that was presented at the time to your council .

As everybody knows, the draft of the law took it’s path to the state Shoura Council, which gratefully, and in a professional way, redrafted it linguistically as well as suggesting some important notes to improve the efficiency of performance, implementation and to ensure the interest of all the Iraqi people, but it did not tackle some other important aspects.

The Council of Ministers approved on 3/7/2007 the draft of the law and referred it to your council for the purpose of discussing and enacting. Although the final draft was not published, but it was noted from the available information, as well as from the pronouncements of officials of the central government and the Kurdistan regional government, that there are still differences concerning the four annexes, that were included in the law, that contains the classification of the producing fields and the discovered but not yet developed fields that are situated near the production centres, to be under the auspices of the national oil company that is to be created under the law ---- these differences resulted in the recommendation that these annexes to be deferred later to the Federal Council of Oil and Gas to consider; a matter which, in our opinion, does not remedy this important issue .

It is worth noting that the Council of Ministers has lately referred to you the draft of the law of distribution of the financial resources, through which an important part of the claims of the Kurdistan region can be handled; hence, at the present time, concentration may be given to the discussing of this financial law and in isolation of the oil and gas law.

President and Members of the Council

After seeing the draft of the oil and gas law, that was referred to you, we noticed that it does not differ in its essence from the first draft except the noticeable improvement in the linguists composition. The present draft has ignored the comments presented by the State Shoura Council as well as all other comments, such as our comments that we formulated in the Amman Symposium, the symposiums held by the oil trade unions and the non-governmental organisations, in addition to many political blocks.

Emanating from our feelings of the extreme importance of the Oil and Gas Law to the present and future of our dear country, we again turn towards you to expend your utmost efforts towards enriching the law with studying and checking and to remove and remedy the sources of faults in it, seeking the help of expert Iraqis of opinions and expertise.

According to the above, we would like to emphasize to your council the following observations:

1 – With our conviction for the need of a law to organise the upstream sector and it’s development, and due to it’s extreme importance, we emphasize the importance of acting steadily and not rushing its issuance before enriching it with more discussions and carry out amendments that ensure the interest of all the Iraqi people, and not to ignore the sector of the processing industries (refining, distribution and gas processing), with the priority given for the enacting of the Iraq National Oil Company law .

2 – There are ongoing discussions aiming to amend the Iraqi Constitution, including the items related to oil and gas; hence we do not see, from the legal and technical point of view, the necessity to enact the law presented to you now before the constitutional amendments are finalized.

3 – Licensing contracts of exploration, development and production, form the backbone of this law, hence it is vital to emphasise the role of the Council of Representatives in the approval of such contracts; similar to what is adopted in the rest of the world. It is regrettable to notice that the authority of the council is restricted to the enacting of the law and the approval of international agreements only.

4 – As for the four annexes attached to the law, they are of vital importance as well, so we emphasise on the Council of Representatives, the necessity to discuss them as part and parcel of the proposed law. We emphasize also upon the role of the Iraqi National Oil Company for the necessity for it to undertake the responsibility of managing all the producing and discovered fields in a form that will safeguard the rights of the Iraqi people completely and not to foresake any of the oil reserves in any contractual format to foreign entities.

5 – We assert the importance and necessity to adopt a comprehensive central plan for the whole of Iraq to determine the priorities of explorations and development efforts according to economic and technical basis prevalent in the oil industry; recognising the importance of the participation of the regions and the governorates in the operations of planning, implementation and management within a comprehensive vision that ensures the maximum benefits for the whole people of Iraq.

6 – The passing of this law without paying attention to the expected impacts of competitions between the regions and the governorates, and what that will entail of conflicts, will definitely lead to the enforcement of the situation of divisions, anarchy and choas; the best example of this, the latest unilateral declaration by the Kurdistan Regional Government offering (40) exploration blocks for foreign investment, without even waiting for the enacting of the federal law and without the existence of a comprehensive and approved central plan for the whole of Iraq, including the Kurdistan region.

Lastly, we call upon the president and the members of the council to take a memorable historical stand that will be remembered and registered for them in protecting the interests of the whole Iraqi people and in defending the rights of its sons in their present and future times.
(Translated into English by Raed Jarrar, AFSC)