The video for this story is not available, but you can still read the transcript below.
No image

Iraqi Lawmakers Struggle with Oil Revenue-sharing Plan

Despite pressure from the U.S. government to quickly enact an oil revenue-sharing law, Iraqi lawmakers have put off approving the measure. Two industry experts detail the obstacles to drafting the oil law.

Read the Full Transcript

  • RAY SUAREZ:

    While a massive hunt continued south of Baghdad for the three U.S. soldiers abducted last Saturday, and fighting intensified between Americans and insurgents in Diyala province north of the Iraqi capital, congressional leaders met with President Bush's top aides in Washington to hammer out a new funding bill that could include benchmarks for the Iraqi government to achieve.

  • One key benchmark:

    passage of a law aimed at sharing the nation's oil revenues among all of Iraq's ethnic and regional groups, and to open the industry to international investment.

    Iraq's proven oil reserves are estimated at about 115 billion barrels, placing it right behind Saudi Arabia and Iran. Going into the war, then-Deputy Defense Secretary Paul Wolfowitz told Congress Iraq could finance any post-war reconstruction with its own oil money.

  • PAUL WOLFOWITZ, Former World Bank President:

    The oil revenues of that country could bring between $50 billion and $100 billion over the course of the next two or three years. We're dealing with a country that can really finance its own reconstruction, and relatively soon.

  • RAY SUAREZ:

    But since the war began four years ago, Iraq has been pumping below pre-war levels, about two million barrels per day. Insurgent attacks on pipelines and refineries have limited the ability to refine or export the oil, and that's despite $3 billion of U.S. aid and $3 billion in Iraqi money for oil industry reconstruction. For ordinary Iraqis, it's meant waiting for hours to fill their gas tanks.

    Much of Iraq's oil is concentrated in the Shiite south, with about 70 percent in and around Basra. And much of the rest is in the Kurdish-controlled north around Kirkuk. That city is divided between Arabs and Kurds. The Kurds want to annex it.

    One proposal would give the oil-producing regions control over the revenues instead of the national government. That worries Sunni Arabs, who are concentrated in oil-poor northwestern and central areas.