POLITICAL AGREEMENT REACHED ON HYDROCARBON LAW )

C O N F I D E N T I A L BAGHDAD 000622

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/19/2017
TAGS: ENRG EPET IZ PREL
SUBJECT: POLITICAL AGREEMENT REACHED ON HYDROCARBON LAW )
CABINET APPROVAL EXPECTED MARCH 21

Classified By: AMBASSADOR ZALMAY KHALILZAD, E.O. 12958 REASONS 1.5 (B)
(D)

1) Ambassador continued his series of consultations with key
Kurdish leaders - former DPM Rowsh Shuways and DPM Barham
Salih - followed by a meeting with PM Maliki and Oil Minister
Shahristani, resulting in agreement on the cover letter for
the hydrocarbon framework law and setting the stage for the
long-awaited cabinet action on the law. A special Council of
Ministers meeting is planned for 15:00 on March 21 to
officially approve the draft law. The key to resolving the
impasse was reached when, at the Ambassador's suggestion,
Rowsh received agreement from KRG Prime Minister Nechirvan
Barzani that he would send a letter to Prime Minister Maliki,
giving the PM a list of the four contracts the KRG has signed
for exploration and development of its oil and gas since the
adoption of the constitution in 2005. Barzani will also make
clear in his letter that the Kurds will not press their
demand for a re-balance of cabinet level positions in
conjunction with the hydrocarbon law. The text of Barzani's
letter was agreed to by both Oil Minister Sharistani and the
Prime Minister.

2) The cover letter provides that the hydrocarbon framework
law, including four annexes listing various categories of
fields and exploration blocks, along with the associated
revenue management law, will be submitted to the Council of
Representatives by March 15. The letter also contains a
statement of intent that the entire package of hydrocarbon
laws and their implementation are to be wrapped up by the end
of May. With the KRG agreement to this approach, and
Shahristani's concurrence, the way is clear for tomorrow's
cabinet approval.
KHALILZAD