Iraq's cabinet has approved a long-awaited draft oil law and sent it to parliament for final passage, a measure seen as key for foreign investors seeking more solid legal guarantees, according to media reports on Sunday. The new hydrocarbons law has been in the making for years but has faced opposition over who controls the world's fourth largest oil reserves, mainly from semi-autonomous Kurdistan in the north of Iraq.
Iraq's parliament last month warned the government it would force through a new draft of the law if the cabinet continued to hold up the original legislation, regarded by investors to be a crucial mark of stability in the OPEC country. "Any other previous drafts should be considered void and should be withdrawn. This draft is the only one presented to parliament," the statement said.
Investors have been waiting for the law's approval to assure a more stable legal framework for exploration. The law is also seen as pivotal to reconciling Iraq's factions -- especially Iraqi Arabs and Kurds -- as the country rebuilds after years of war.
Even without the law, Iraq is already developing oil-fields, signing billions of dollars in contracts with international companies under legislation dating back to before 2003 when a U.S. invasion ousted Saddam Hussein.
The draft oil law was approved by cabinet in 2007 but faced opposition in parliament and was sent back to the government for amendments. In June, Iraq made some changes to the law, which were being reviewed by the cabinet's energy committee.