Production trending up but provincial disputes hinder long-term development ///

The major focus in Iraq over the past year has been the bitter dispute between Iraq’s Oil Ministry and the northern Kurdish Regional Government (KRG) over the national hydrocarbons law, which was drafted for consideration by law makers in 2007. The dispute revolves around how much control the federal government in Baghdad should have over regional oil operations, how revenues would be shared between regional and central governments, and the rights of regional administrations to negotiate contracts with international oil companies. Control of Kirkuk, the disputed northern province that contains Iraq’s largest oil field of that name, is also a factor in that dispute. Kurdistan, which was effectively prevented from developing and producing oil and excluded from Kirkuk’s revenues during the Saddam Hussein era, is now keen to develop its other petroleum resources aggressively, and regain some revenue benefits from Kirkuk. KRG argues that Article 110 of the Iraqi constitution enshrines Kurdistan’s legal right to oil self-determination.

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