Oil Law issues

So the optimistic reports of the imminent passage of the Iraqi Oil law were likely overhasty. The draft sent to Parliament caused massive resistance across the country. "It's taken this back to square one, frankly," KRG Natural Resources Minister Ashti Hawrami told UPI from his mobile phone in Irbil. The Kurds, previously the laws biggest supporters, now have also come down against it, saying that Iraq's Shoura Council (whose job is to ensure laws are constitutional) had made excessive alteration to it. "They assume the constitution will be changed and they took the view the (disputed) articles in the law should be brought in line with the future constitution, not the current constitution," Hawrami said.
On top of the obvious issue of internal division of oil profits, (and many in Iraq are arguing that the current draft is too decentralized) another issue is the accessibility for foreign oil company investment. Almost any step in this direction merely seems to validate Iraqi fears that it really is about the oil. A complete elimination of such allowances seemingly will doom Iraqi oil fields to very slow development. The decentralization of the oil revenues is the trickier of the two issues and with many dangers existing in going to far in either direction. On the issue of foreign investment the answer seems clearer. Of the two dangers one is much more of a long term issue (slow development) which will give time for the Iraqi people to adjust on their own and either develop their own technical class (which is already significantly larger than many of the other Gulf states) and/or slowly open up to foreign investment. Opening up now in really any significant way is very dangerous. It reinforces many fears of both the Iraqi people and the world community and will alienate many moderates who either support the American presence in the short run or are ambivalent. The much quicker increase in oil revenues will only magnify any mistakes made in the revenue decentralization decisions. The resource curse (or the paradox of plenty) is real, and the faster the money comes the less time Iraq will have to adjust to it. The oil law is a central part of Iraq's future stability, but rushing it will be a most dangerous mistake.

interesting links and reading:
Oil Funds: Answer to the Paradox of Plenty?
Iraqi Oil Law
Smith, Benjamin . "Oil Wealth and Regime Survival in the Developing World, 1960-1999." American Journal of Political Science, Vol. 48, No. 2. (Apr., 2004), pp. 232-246.