October 04, 2009

Iraq delays hydrocarbons law until after election: MP

Oct 3, 2009 - 1:53 pm ET

BAGHDAD (AFP) – Iraq has delayed the discussion of a stalled hydrocarbons law, seen as key to the country ramping up its oil production, until after parliamentary elections in January, a senior MP said on Saturday.

The proposed law, which would regulate the oil sector and divide responsibility between the central government in Baghdad and Iraq's provinces, has been held up for three years due to disagreements between MPs from the country's majority Shia and minority Sunni, Kurd and other communities.

"There is no agreement on the contents of the oil law ... because this government wants the management of the oil sector to be centralised," said Ali Hussein Balo, a Kurd and chairman of the parliamentary oil and gas committee.

"Due to these conflicts, we have decided to delay the oil law enactment until after the election," he told AFP.

Iraq hopes to be able to pump six million barrels per day, up from current output of around 2.5 million, within the next four to five years as new projects come online, Oil Minister Hussein al-Shahristani has said.

The country has the world's third-largest proven reserves of oil, with more than 115 billion barrels, behind only Saudi Arabia and Iran.

But investment in Iraq's ageing energy infrastructure has been hampered by delays to the hydrocarbons law.

When the government auctioned eight major energy contracts in June, only energy giants BP and China's CNPC won a bid, agreeing to receive only two dollars a barrel to operate the giant Rumaila field, which has known reserves of 17.7 billion barrels.

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