Oil Bill Heads to Iraqi Parliament

BAGHDAD - The Iraqi Cabinet signed off Tuesday on a revised bill to regulate the country's oil industry and sent it to parliament - a major step in reaching a long-delayed benchmark sought by the U.S. to promote reconciliation between Iraq's Sunnis and Shiites.

Within hours of the announcement, however, the legislation hit a snag - the Kurds said they had neither seen nor approved the final text and might oppose it.

American officials are hoping that passage of the oil bill and companion legislation to distribute oil revenues will help rally Sunni support for the government and reduce backing for the insurgents.

In the latest violence, a car bomb exploded late Tuesday at an outdoor market in the Shaab area of northeast Baghdad, killing 18 people and wounding 35, a police officer said on condition of anonymity because he was not supposed to release the information.

The market is in a Shiite neighborhood frequently target by Sunni bombers.

Prime Minister Nouri al-Maliki told reporters his Cabinet had unanimously approved the oil draft and that the parliament would begin discussing it the following day. He called the bill "the most important law in Iraq."

The Cabinet endorsed one version of the legislation last February. But the Kurds protested that that measure was unconstitutional because it gave too much power to a yet-to-be-established national oil company in managing the country's oil fields.

Government spokesman Ali al-Dabbagh did not release the bill's final version.

In a statement posted on its Web site, the Kurdistan Regional Government said it would reject the latest text if it made "material and substantive changes" to the outline agreed upon during weeks of protracted negotiations.

"We have not seen the final text of the law that the Iraqi Cabinet says it will put to parliament," the statement said. "We hope that the Cabinet is not approving a text with which the (Kurdish administration) disagrees because this would violate the constitutional rights of the Kurdistan region."

The Kurds control 53 of the 275 seats - not enough to defeat the measure on its own but enough to stall approval.

Only 24 of the Cabinet's 37 members were present for the vote because of boycotts by ministers from the Sunni Iraqi Accordance Front and the Shiite bloc local to anti-American cleric Muqtada al-Sadr. Both groups have separate political disputes with al-Maliki.

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.

Al-Dabbagh said the Cabinet could take up the draft bill on restoring government jobs to many former Saddam loyalists on Thursday.

With support for the war at an all-time low in the United States, those measures would also help convince the U.S. public and Congress that Iraqi leaders are doing what is needed to halt the violence.

Bush ordered 28,000 more U.S. troops to Iraq this year to try to reduce the violence and encourage the Iraqis to reach political agreements among Shiites, Sunnis and Kurds.

The offensive in Baghdad and areas to the north and south has boosted American casualties, although the number of bombings and shootings has fallen in the capital in recent days.

In June, Iraqi civilian deaths dropped to their lowest monthly level since the start of the Baghdad security operation, according to the Interior Ministry. Iraqi officials attribute the decline to the offensive, which has put pressure on insurgents.

Nevertheless, violence continued.

The U.S. command said American troops fought a large battle with gunmen near the western Sunni city of Ramadi over the weekend, in fighting that left 23 insurgents dead. The insurgents had massed on Donkey Island, a patch of land in a canal outside the city, and opened fire on U.S. troops, prompting the gunbattle Saturday.

Troops found caches of weapons, explosives and suicide vests, the military said.

Also Tuesday, the command said insurgents forced down a U.S. military Kiowa helicopter south of Baghdad the day before. An Apache helicopter rescued the two pilots, who were slightly hurt, it said.

In Baghdad, an Iraqi army lieutenant colonel and an Interior Ministry intelligence officer were killed in separate drive-by shootings Tuesday, police said. A car bomb hit the convoy of an Iraqi police colonel in the northern city of Kirkuk, killing two passers-by and wounding 17, though the colonel survived, police in the city said. Police in both cities spoke on condition of anonymity because they were not supposed to release such information.