Iraq's semi-autonomous Kurdish government approved a regional oil law paving the way for foreign investment in its northern oil and gas fields even as similar U.S.-backed legislation for the entire country remained stalled.


The measure gives the regional government the right to administer its oil wealth in the three northern governates — Irbil, Sulaimaniyah and Dahuk — as well as what it called "disputed territories," referring to Kirkuk, one of Iraq's largest crude oil hubs.


Kurdish Prime Minister Nechirvan Barzani signed the law Tuesday, calling it a "historic moment."


"This is the first time in Iraq's history that we have a say regarding our natural resources within the frame of the Iraqi constitution," he said at a news conference in Irbil, 220 miles north of Baghdad.


The Kurdish law is separate from the proposed national oil law, which aims to divide Iraq's oil wealth among Sunnis, Shiites, Kurds and other Iraqi groups. It has been bogged down due to wide differences between Sunnis, Shiites and Kurds on local control of oil fields.



The oil law is one of the so-called benchmarks in Washington's efforts to encourage national unity in Iraq. The Iraqi parliament has adjourned for a monthlong vacation and so will not take up the issue until at least September.


Sunni Arabs, who are centered in regions of Iraq without proven oil reserves, are pressing to maintain central control of the industry, fearing that Kurds and Shiites in the oil-rich north and south will monopolize control of oil contracts and hoard the profits.


Kurds and Shiites are eager for control of the resources they were largely deprived of under Saddam Hussein's Sunni-dominated rule. The Kurds also want to ensure they run development of lucrative future oil discoveries in their autonomous region.


Underscoring the divisions, the hard-line Sunni Association of Muslim Scholars issued an Internet statement rejecting the Kurdish oil law and called on foreign firms not to invest in the area. It said Kurdish leaders were part of the U.S.-led "occupation" in Iraq and therefore had "no right to handle the oil resources of Iraqis," warning that foreign firms could face compensation demands in the future.


In the latest draft of the national oil law, Shiite, Sunni and Kurdish officials agreed on the distribution of revenues, with the northern Kurdish autonomous region getting 17% of the net revenues each month, after deducting federal government expenditures.


Barzani said the Kurdish law initially will seek the same financial cut, but it was unclear how the Kurds would calculate the total Iraqi oil and gas production since nearly all facilities are crippled by warfare and insurgent attacks.


In June, the Kurdish regional government said it was planning to offer 40 new oil blocks to foreign companies.


Kurdistan's Natural Resource Minister Ashti Hawrami said at the time that these oil blocks would be formally opened to competitive bidding once the Kurds' own petroleum law is approved by the parliament.


"The Kurdish oil law addresses the needs of all Iraqis," Hawrami added. "We (the Kurds) want to set an example for all of Iraq."


Source: Associated Press