Oil and War: The 2007 Final Draft Petroleum Law of Iraq
14 Pages Posted: 15 Apr 2007 Last revised: 22 Jun 2020
Date Written: September 17, 2007
It is 2007 and for more than a year Iraq's Central Government (ICG) has been attempting to pass its first post-invasion national petroleum law (Oil Law). If passed by the Iraqi Council of Representatives, the Oil Law will provide the legal framework for the future exploitation of Iraq's vast oil wealth. But that is not going to happen. Although the political reconciliation needed to pass the Oil Law is failing, the law is an important piece of legislation that will eventually play a crucial role in the reconstruction of the oil industry in Iraq. The proposed law authorizes oil sector privatization in the form of production-sharing contracts, or PSCs. Under the new Oil Law, PSCs permit foreign oil companies (FOCs) to sign contracts directly with the ICG to develop specific areas of Iraq's petroleum sector in exchange for a share of the oil profits. Iraq's oil sector has been greatly damaged by decades of conflict, and is now in need of massive redevelopment, foreign investment, and expansion.
Keywords: Iraq, War, Privitization, Investment, Petroleum, Energy, Concessions
JEL Classification: Q3, Q4, N5, N55, L71, L72, K12, K32, K33, F23, F21
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