Taking the Lead on Iraqi Oil

The Wall Street Journal, Opinion

By Nechirvan Barzani, Prime Minister of the KRG

October 6, 2007

This August, the Kurdistan Regional Government (KRG) of Iraq passed an oil and gas law to regulate the oil sector in our region. So far, we have signed eight production-sharing contracts with international oil and gas companies. We expect to sign another two in the near future.

We were deeply disappointed by the negative reaction of several officials in Baghdad to these contracts. In the last several months it has become clear to us that many in the Iraqi Oil Ministry are locked in a time warp dating back to the regime of Saddam Hussein, in which Baghdad holds tight control of all the resources of Iraq and uses these resources to create obeisance and loyalty to the center.

The KRG production sharing contracts are fully consistent with the Iraqi Constitution, which gives the regions of Iraq substantial control over natural resources. The contracts are also fully consistent with the draft Iraqi oil law that was agreed to this March, but has yet to be passed by the Iraqi National Assembly. The Kurdistan region's oil law, passed in August by our parliament, is 100% faithful to the agreed draft of the Iraqi law, and includes provisions for the KRG to share its oil revenue with the rest of Iraq in the same 83%-17% ratio. If we had intended to "go it alone," why would we ever consider passing a law which requires us to give 83% of the revenues to the rest of Iraq ? We waited five months for the Iraqi Assembly to pass the agreed draft -- they have not acted, and there is no sign that they will act anytime soon. We decided to "lead from the front."

The Bush administration and Congress have been pressing the government in Baghdad to move ahead on a fair, transparent and efficient oil law. So have we. Neither of us have had any success. Thus, we have chosen to pass in our own assembly the very same law that was agreed to by all parties in March of this year.

We hope our friends and supporters in the U.S. will understand that this is not an attempt to usurp the nation's oil resources, but rather our best effort to move the process forward, leading by example to make these valuable resources work for the people of Iraq . The resources that can ease the suffering of the people of Iraq lie beneath our feet.

The Kurdistan region has achieved great things since the liberation of 2003. We are proud to be described as the model for the rest of Iraq : tolerant, democratic, peaceful and working toward economic prosperity. We have been given a chance to build a bright future after decades of oppression and violence. Our political system, our judicial system, our physical infrastructure and our educational system all are in great need of modernization, but we will persevere with the help of our friends and by the fruits of our labor.

In 2003, we chose voluntarily and openly to remain part of Iraq , and we will continue to do so. But does this mean that we have to be held back by the chaos and bloodshed that dominate the rest of the country? Must we sit idly by, waiting for Iraqi politicians to waste months debating oil legislation that has already been agreed upon by the major parties?

We have tried our best to be a loyal ally of the U.S. We have supported nearly every major initiative and decision that the U.S. has sought in Iraq -- sometimes contrary to what we consider to be in our best interests. We will continue to do so because we believe that there is no alternative to maintaining the U.S. presence in Iraq . We want the U.S. to remain, and we need American help. In return for our loyalty we ask understanding. We are not a "rogue province" seeking an early escape from the chaos that has become Iraq . We are a people and a region that have seen nothing but death, destruction and deprivation from Baghdad over the decades. Does it surprise anyone that we harbor deep suspicions about becoming reliant on the capital that has brought us such misery for so many years?

In the past, oil in the Kurdistan region has been more of a curse than a blessing. The people have never benefited from our natural resources. Successive governments in Iraq have deliberately left our oil in the ground in an effort to keep our people poor and to deny our aspirations for a better way of life. Now, after so much suffering, we have a chance to turn this curse into a blessing. And we are asked to wait while the Iraqi parliament takes its vacation, and then considers new ways to manage our resources.

The answer is found in the principles of the Iraqi Constitution, the U.S. Constitution and many others around the world -- federalism. This is not just a concept to us. Federalism means that we have the liberty to develop our resources under the umbrella, but not the central control, of Iraq . It means that as 17% of the population we will receive 17% of the wealth, and that we will accordingly share 83% of our wealth with the rest of the population.

We want peace and prosperity for the rest of Iraq as well. We will contribute our fair share and more to that goal. But we cannot be asked to sit by and postpone our aspirations for prosperity in pursuit of a vision of a centralized Iraq that long ago passed from reality. We are trying to lead by example in all that we do. Our oil law, and the contracts we have signed, are nothing more than that.

Mr. Barzani is the prime minister of the Kurdistan Regional Government in Iraq .