'Benchmark' oil bill heads for parliament

The Iraqi Cabinet signed off on a revised bill to share the country’s oil wealth today and sent it to parliament – a major step in reaching a long-delayed benchmark sought by the US to promote reconciliation between Iraq’s Sunnis and Shiites.

American officials are hoping that passage of the oil bill will help rally Sunni support for the government and the political process and reduce backing for the insurgents.

In the latest violence, a car bomb exploded this evening at an outdoor market in the Shaab area of north-east Baghdad, killing 18 people and wounding 35, a police officer said on condition of anonymity because he was not supposed to release the information.

The market is located in a Shiite neighbourhood and has been frequently targeted by bombers in recent months.

Prime Minister Nouri Maliki announced that his Cabinet had unanimously approved the oil draft and that the parliament would begin discussing it the following day.

He called the bill “the most important law in Iraq.”

The Cabinet endorsed one version of the legislation last February. But the Kurds protested that that measure was unconstitutional because it gave too much power to a yet-to-be-established national oil company in managing the country’s oilfields.

Only 24 of the Cabinet’s 37 members were present for the vote because of boycotts by ministers from the Sunni Iraqi Accordance Front and the Shiite bloc local to anti-American cleric Muqtada al-Sadr. Both groups have separate political disputes with Maliki.

Nevertheless, government officials expressed confidence that parliament would approve the measure.

Government spokesman Ali al-Dabbagh said Cabinet approval came after amendments prompted by the Accordance Front, but he did not give details on the changes or the bill’s final version.

The bill would regulate Iraq’s vast oil industry and provide a formula for distributing revenues among the 18 provinces. Iraq’s proven oil reserves have been estimated at 115 billion barrels – second largest in OPEC after Saudi Arabia.

Some petroleum experts believe the real figure is even higher because Iraq lagged behind other countries in using modern surveying technology during the years of international sanctions under Saddam Hussein.

Production has fallen from 3.5 million barrels a day to two million since the US invasion because of security problems, especially in the northern fields. The bill is aimed at encouraging international investments to modernise the fields.

The issue of oil distribution is a top concern of Iraq’s Sunni Arab minority, which is centred in regions of the country with little proven reserves. The 2005 constitution gave regional administrations considerable powers in managing oil resources in their areas.

Most of Iraq’s known reserves lie in the Kurdish north and the Shiite south. Sunnis feared the Shiites and Kurds – who now dominate the government – would monopolise profits from the industry.

US officials are hoping that passage of an oil bill will help rally Sunni support for the government and the political process and reduce backing for insurgents.

Shiite, Sunni and Kurdish officials agreed last month on the distribution of revenues, with the northern Kurdish autonomous region getting 17 of the net revenues each month, after deducting federal government expenditures.

Kurds make up about 20% of the population nationwide. The rest of the revenues will be divided among the other provinces according to population.

If parliament approves the bill, it would be the first of a series of benchmark legislation to be enacted. The Iraqis pledged to meet the benchmarks by the end of last year but failed due to political haggling and the security crisis.

US President George Bush has pressed Maliki to take a series of other political steps – opening jobs to Sunnis who supported Saddam, amending the constitution to satisfy Sunni aspirations and holding local elections – aimed at bringing Sunni Arabs into the political process.

Al-Dabbagh said the Cabinet could take up the draft bill on restoring government jobs to many former Saddam loyalists on Thursday.

With support for the war at an all-time low in the United States, those measures would also help convince the U.S. public and Congress that Iraqi leaders are doing what is needed to halt the violence.

Bush ordered 28,000 more US troops to Iraq this year to try to tamp down on the violence and encourage the Iraqis to reach political agreements among Shiites, Sunnis and Kurds.

The offensive in Baghdad and areas to the north and south has boosted American casualties, although the number of bombings and shootings has fallen in the city in recent days.

In June, Iraqi civilian deaths dropped to their lowest monthly level since the start of the Baghdad security operation, according to the Interior Ministry. Iraqi officials attribute the decline to the offensive which has put pressure on insurgents.

Nevertheless, violence continued.

The US command said American troops fought a large battle with gunmen near the western Sunni city of Ramadi over the weekend, in fighting that left 23 insurgents dead. The insurgents had massed on Donkey Island, a patch of land in a canal outside the city, and opened fire on US troops, prompting the gun battle Saturday.

Troops found caches of weapons, explosives and suicide vests, the military said.

Also today, the command said a US military Kiowa helicopter was forced down by insurgents south of Baghdad the day before. An Apache helicopter rescued the two pilots, who were lightly hurt, it said.

In Baghdad, an Iraqi army lieutenant colonel and an Interior Ministry intelligence officer were killed in separate drive-by shootings today, police said.

A car bomb hit the convoy of an Iraqi police colonel in the northern city of Kirkuk, killing two passers-by and wounding 17, though the colonel survived, police in the city said.