So THIS Is How They Made It Work

From Missing Links

Oil and Gas Law: Behind the “agreement”

Al-Hayat provides an explanation how the Americans (and the British) finally got the Iraqi cabinet to agree on a draft oil law, the point being that main unresolved issue (as far as the draft text of the law is concerned) had to do with the competing claims to control over oil and gas extraction contracts in Kurdistan, by the regional government on the one side, and the central government on the other. The Al-Hayat reporter quotes Mahmoud Othman, a Kurdish member of the national parliament, but not a member of either of the two big Kurdish parties, on how this was settled: US ambassador Khalilzad, on his latest trip to the region, proposed that they simply agree between them that half of the contracts would be under the auspices of the regional government, and the other half under the auspices of the central government. The implication is the text of the law can be left vague, but that there is a side-understanding between the US and the Kurds, to the effect that they will split oil jurisdiction 50-50 between the Kurdish regional government, and the US-controlled central government. Here is the text of what Al-Hayat says Othman said:

Kurdish deputy Mahmoud Othman said “the British and the Americans, who were in a hurry to decide on an oil and gas law, had a major role in convincing the Kurds to accept [this version]”… Othman explained some of the details of the process, that led to the council of Ministers approving this after so many months of disagreement between the central government and the regional government. The British and the Americans, who were bound and determined to accelerate the process of deciding on an oil and gas law, had a major role in convincing the Kurdish parties to accept this, after intensive discussions between the parties leading to haggling about exploitation, contract-management, and distribution. Othman added: “The latest visit by US ambassador Khalilzad to [the Kurdish region] focused on convincing the Kurds to accept [the current version] after promising them that the new law would protect Kurdish interests,” and Othman explained: “The Kurds had wanted the authority to enter into contracts for oil and exploitation and the granting of operating permits to corporations, on a par with the authority of the central government [elsewhere in Iraq], while the Baghdad government wanted to have a presence in overseeing contracts [in Kurdistan] equal to that of the the Kurds.” Othman said: “That was finally agreed, but only after an agreement that one-half of the contracts signed would be within the jurisdiction of the Region of Kurdistan”.

In other words, if I am reading this right, where the text of the law calls for joint participation by the Baghdad and the Kurds in contract-management for properties in Kurdistan, the side-agreement arranged by Khalilzad, which finally brought the Kurds to agreement, was that the contracts would be split 50-50, with one side controlling one-half of them, and the other side the other half. Naturally it would be impossible to include something like that in law, for one thing because of the impossibility of designating which contracts are under the control of which government, and for another thing because it would cast doubt on the idea of genuinely shared jurisdiction.

Read the rest here.

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