Iraq Constitution: Petroleum Resources Legislation and International Policy

This book covers policy proposals and interim contracts, assesses the positions of various Iraqi political actors and examines the potential significance for international foreign policy goals in Iraq. Despite a lack of progress in reaching agreements on the hydro-carbon sector and revenue sharing legislation to set new conditions for the management of the country's significant oil and gas resources, development in Iraq's oil and gas sector is moving forward.
The passage of the oil and gas sector framework and revenue sharing legislation will be seen as significant milestones by International governments and International Oil Companies (IOC´s). This would provide evidence of the Iraqi government's dedication to promoting political reconciliation and providing a solid foundation for long term economic development in Iraq. Interim revenue sharing mechanisms have been introduced due to the lack of new legislation. Additionally, both the Federal Government (the Federal Oil Ministry-MoO) and the Kurdistan Regional Government (KRG) (the Regional Ministry of Natural Resources and Energy) have made oil and gas development deals with foreign firms. The MoO is working with existing regulation from the previous political and administrational regime, while the Regional Ministry of Resource and Energy Kurdistan-Iraq has designed its own laws and regulations, which the Federal Government has not yet recognized.
There is wide recognition among Iraqis of the importance of oil and gas revenue for the Iraqi economy. Most groups see the need for new legal and policy guidelines for the development of the country's oil and natural gas resources. However, Iraq's Council of Representatives (parliament) has not yet considered the proposed legislation due to ongoing political discord and general political instability. There are strong differences on key issues between Iraqi critics and supporters of various proposed solutions. These include the appropriate role and powers of federal and regional authorities in regulating oil and gas development; the conditions and degree of potential foreign participation in the oil and gas sectors; and proposed formulas and mechanisms for equitably sharing oil and gas revenue. Simultaneously, there are strong disagreements on related discussions about the administrative status of the city of Kirkuk and proposed amendments to articles of Iraq's constitution that outline federal and regional oil and gas rights.
The U.S. and UK military strategy in Iraq seeks to lay the ground work for an environment in which Iraqis can resolve core political differences in order to ensure national stability and security. However, it is not yet certain whether the proposed oil and gas legislation and ongoing interim efforts to develop Iraq's energy resources will support harmony or create deeper political tension.
The United States and its allies face difficult decisions regarding how to work with Iraqis on assorted policy proposals, related constitutional reforms and oil and gas development contracts, and at the same time encouraging their Iraqi counterparts to ensure that the content of proposed laws, amendments and contracts reflect acceptable political compromises.
In the 1920s a wide-ranging concession was granted to a consortium of oil companies known as the Turkish Petroleum company and later as the Iraq Petroleum Company. This was the beginning of oil exploration in Iraq. The nationalization of Iraq's oil resources and production was finished by 1975. From 1975 to 2003, oil production and export operations were entirely state operated. However, from the early 1980s until the toppling of Saddam Hussein's government in 2003, the negative effects of war, international sanctions, a shortage of investments and technology and, in many cases, mismanagement caused difficulties for Iraq's hydrocarbon infrastructure.

Dr Muhammed Mazeel Al-Aboudi has worked for many years in the international sector of the oil and gas industry in several countries. He studied at the Faculty of Mining and Geology-Department of Petroleum engineering of the University of Belgrade (Diploma in Engineering), the Escuela Superior de Minas in Madrid, Spain (Credit in Applied Geophysics Engineering) and the University of Clausthal-Zellerfeld in Germany. He was awarded a PhD in Petroleum Engineering by the Technical University of Clausthal. He is working on another PhD in Petroleum Economics. After completing his PhD, he started working as Petroleum, Drilling, Production and Reservoir Engineer, focusing on issues like Fiscal Regimes, World Oil and Gas Field Developments, Investment, Cost Estimation, Energy Politics and Laws. Dr Mazeel has been employed in many European companies as a Senior Petroleum Engineer; He has also worked as Director General of the Iraqi Drilling Company (IDC) and Director General for the Oil Products Distribution Company (OPDC). At the same time, he was the oil industry adviser to the Iraqi Prime Minister Dr Ibrahim Al-Jaafari. He is the Author of many papers on petroleum engineering for the Society of Petroleum Engineers (SPE), the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and the German Oil-Gas Coal Magazine (EEZ). His next books, on Exploration Strategy of own-State Petroleum Companies, Formation Damage and Fundamentals of Gas Reservoir and Production Engineering are in editing and will be published soon.