Last updated on: 6/6/2008 8:36:00 AM PST
What were the initial plans for the distribution of post-war Iraqi oil and its revenues?


General Reference (not clearly pro or con)
Edward Wong, correspondent for the New York Times, stated in his Dec. 9, 2006 article "Iraqis Near Deal on Distribution of Oil Revenues":

"Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.

If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.

The Iraq Study Group report stressed that an oil law guaranteeing an equitable distribution of revenues was crucial to the process of national reconciliation, and thus to ending the war.

Without such a law, it would also be impossible for Iraq to attract the foreign investment it desperately needs to bolster its oil industry."


Dec. 9, 2006 - Edward Wong 

The Official Draft of the Oil and Gas Law of the Iraq Republic, of Jan. 15, 2007, in an unofficial translation provided by Raed Jarrar, Iraq Project Director for Global Exchange, stated:

"ARTICLE 11

Petroleum revenue

...B- The oil revenues include all the government revenues from oil and gas, royaltys [sic], signing rewards and production rewards of petroleum contracts with foreign or local companies.

C- The revenues mentioned in article 11/A [oil and gas resource revenues] must be deposited in an account called 'the oil revenue treasury' opened under the name of the Iraqi Central Bank specifically for this reason, and managed by the Council of Ministers and the ministry of treasury. The oil revenue treasury must be administrated by an independent entity headed by an employee whose rank is a minister. This entity must include representatives from the federal government, regions’ governments, provinces, and a number of independent consultants, and the entity must be associated with the Council of Ministers and must be formed directly after issuing this law. This entity must create its own bylaw, and must periodically publish all the financial data related to the oil revenue treasury.

D- The government’s revenue, including the oil revenue, must be distributed in through the federal budget in a fair and just way in adherence to the constitution.

E- Another treasury must be created under the name 'The Future Treasury,' and a certain ratio of oil revenue must be deposited in this treasury regulated by the law."


Jan. 15, 2007 - The Official Draft of the Oil and Gas Law of The Iraq Republic, unofficial English translation by Raed Jarrar (143 KB)  
The Official Draft of the Oil and Gas Law of The Iraq Republic, Arabic version (920 KB)  

Kamil al-Mehaidi, an Iraqi petroleum advisor, stated in his May 2006 article "Geographical Distribution of Iraqi Oil Fields And Its Relation with the New Constitution," published by the Revenue Watch Institute:

"...78% of the known oil reserves will be included in the distribution for all Iraqis, pursuant to Article 112 (I), versus 22% that will remain in the hands of the producing provinces, if we consider that the four huge fields (Majnoun, Nahr Omar, West Qurna and East Baghdad) are current fields. However, if we consider them as new fields, the proportion that would be distributed to all Iraqi people will drop to 36%, versus 64% for the producing provinces. This enormous difference between the two scenarios may stir new conflicts between the producing provinces and the remaining regions and provinces."

May 2006 - Kamil al-Mehaidi 

The Iraq Constitutional Review Committee, in May 2006, proposed its "2007 Amended Iraqi Constitution," which rewrote Article 111 and Article 112 of the "Oct. 15, 2005 Iraqi Constitution," establishing the ownership and distribution of Iraqi oil:

"Article 111:

Oil and gas are owned by all the people of Iraq in all the regions and governorates.

Article 112:

First: The federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas extracted from present fields, provided that it distributes its revenues in a fair manner in proportion to the population distribution in all parts of the country, specifying an allotment for a specified period for the damaged regions which were unjustly deprived of them by the former regime, and the regions that were damaged afterwards in a way that ensures balanced development in different areas of the country, and this shall be regulated by a law."


Iraq Constitutional Review Committee 

Proposed 2007 Amended Iraqi Constitution   1 MB
2005 Iraqi Constitution   1 MB

[Editor's Note: The 2006 Amended Iraqi Constitution provided above was taken from the "English version" of the Iraqi Government website. Articles 111 and 112 appear as 110 and 111 respectively in the translated version of the 2006 Amended Iraqi Constitution. This may be due to an error in translation.]


The Independent stated in its Jan. 7, 2007 article titled "Blood and Oil: How the West Will Profit from Iraq's Most Precious Commodity":

"A 40-page document leaked to the 'IoS' [The Independent on Sunday] sets out the legal framework for the Iraqi government to sign production- sharing agreement contracts with foreign companies to develop its vast oil reserves.

The paper lays the groundwork for profit-sharing partnerships between the Iraqi government and international oil companies. It also lays out the basis for co-operation between Iraq's federal government and its regional authorities to develop oil fields.

The document adds that oil companies will enjoy contracts to extract Iraqi oil for up to 30 years, and stresses that Iraq needs foreign investment for the 'quick and substantial funding of reconstruction and modernisation projects.'

It concludes that the proposed hydrocarbon law is of 'great importance to the whole nation as well as to all investors in the sector' and that the proceeds from foreign investment in Iraq's oilfields would, in the long term, decrease dependence on oil and gas revenues."


Jan. 7, 2007 - The Independent