Iraq oil law should pass easily

The draft oil law aims to ease tension by ensuring all of Iraq benefits from the country's oil, which is mainly located in the north and south. (Getty Images)

Iraq's draft oil law should pass by a comfortable majority when parliament meets to discuss it after the end of its summer break in September, Iraqi vice president Adel Abdul-Mahdi said.

"The oil law was completed in cabinet... the draft that was approved in cabinet is the one that will be presented to parliament," he told Reuters late on Tuesday, ahead of an Iraqi investment conference in Dubai.

"The parliament remains now in recess and will return at the start of September when we will reaffirm that the law will be presented to the parliament."

The controversial federal oil law has been approved by the Iraqi government after months of talks but has yet to be debated by parliament, which must approve it if it is to pass into law.

The law, which decides who controls the world's third-largest oil reserves, is now in limbo while Iraq's parliament takes its summer break.

No date has been set to debate the law, which aims to provide a legal framework to attract foreign investment and sets up a new state oil firm to oversee the sector.

Washington has pushed Iraq for months to speed up its passage and that of other legislation, which it sees as pivotal to reconciling warring Iraqis, rebuilding Iraq's shattered economy and attracting foreign investment.

The draft oil law aims to ease tension by ensuring Sunni Arabs share in oil profits though most of the reserves are in the Kurdish north and the Shi'ite Muslim south of the country.

But there has been fierce debate over the shares and how much control regional governments will have over the existing and undiscovered oil reserves, as well as the sorts of contracts that will be included.

Appendices?

Abdul-Mahdi said that some appendices to the law could be included to ensure the broadest possible political consensus, even though the law was expected to pass comfortably as it is.

"There are some parliamentary blocs that call for the addition of some appendices to this law. Fine, the committee is studying this and the appendices could be included in this law despite the fact that if the voting took place in parliament now... the law would be expected to pass with a comfortable majority," he said.

"But in the interests of national consensus, it is seen that their addition would be more beneficial and get a higher level of consensus than the comfortable majority that would be expected if it was presented now."

Abdul-Mahdi was among Iraq's top five Sunni, Shi'ite and Kurdish political leaders who announced on Sunday that they had reached consensus on measures considered vital to fostering national reconciliation in a country riven by sectarian strife.

The agreement was one of the most significant political developments in Iraq for months and was welcomed by Washington.

Iraqi officials said the leaders agreed on draft legislation to ease curbs on former members of Saddam Hussein's Baath Party entering the military and civil service and endorsed the draft oil law, though a statement from President Jalal Talabani's office said more discussion was needed on the oil law.

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