Iraqi Oil Bill Heads to Parliament

A US soldier stands guard in Baqouba, Iraq, 60 kilometers (35 miles) northeast of Baghdad Tuesday, July 3, 2007. The US and Iraqi forces launched an offensive in attempt to clear the town of militants. (AP Photo/Talal Mohammed) (Talal Mohammed - AP)

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

Al-Dabbagh said Cabinet approval came after amendments prompted by the Accordance Front, but he gave no details.

The bill is part of a package of legislation that would establish rules for exploiting Iraq's vast oil wealth 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 2 million since the U.S. invasion because of security problems, especially in the northern fields. The bill is aimed at encouraging international investments to modernize the fields.

The issue of oil distribution is a top concern of Iraq's Sunni Arab minority, which is centered 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 monopolize profits from the industry.

U.S. 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 percent of the net revenues each month, after deducting federal government expenditures.

Kurds make up about 20 percent 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.

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