Iraqis Reach an Accord on Oil Revenues

By EDWARD WONG
New York Times

BAGHDAD, Feb. 26 — The Iraqi cabinet approved a draft of a law on Monday that would set guidelines for nationwide distribution of oil revenues and foreign investment in the immense oil industry. The endorsement reflected a major agreement among the country’s ethnic and sectarian political blocs on one of Iraq’s most divisive issues.

The draft law approved by the cabinet allows the central government to distribute oil revenues to the provinces or regions based on population, which could lessen the economic concerns of the rebellious Sunni Arabs, who fear being cut out of Iraq’s vast potential oil wealth by the dominant Shiites and Kurds. Most of Iraq’s crude oil reserves lie in the Shiite south and Kurdish north.

The law also grants regional oil companies or governments the power to sign contracts with foreign companies for exploration and development of fields, opening the door for investment by foreign companies in a country whose oil reserves rank among the world’s three largest.

Iraqi officials say dozens of major foreign companies, including ones based in the United States, Russia and China, have expressed strong interest in developing fields or have done some work with the Iraqi industry. The national oil law would allow regions to enter into production-sharing agreements with foreign companies, which some Iraqis say could lead to foreigners reaping too much of the country’s oil wealth.

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