* Iraq further from oil law, needed as disputes deepen
* 5th licensing round delayed due to unrest
* Says Baghdad's black list counter-productive
LONDON, Feb 7 (Reuters) - Iraq is not likely to pass a
hydrocarbon law anytime soon as the government has little
interest in pushing a draft through parliament, the head of
Iraq's parliamentary oil and energy committee said in an
Oil is at the heart of a dispute between Iraq's central
government and the autonomous Kurdistan northern region, which
has been gaining more economic independence and eroding
Baghdad's claims of authority over exploration and exports.
A draft for the unified Iraqi hydrocarbon law to resolve the
issue has been under discussion in parliament since 2007, but
infighting among the country's Shi'ite, Sunni, and Kurdish
factions has so far scuttled attempts to pass the legislation.
"It is at the bottom of the government's list. The
centralists of the ruling party have no interest to sustain a
federal policy or pass a federal law," Adnan Al-Janabi, a
leading Sunni figure, said.
"Therefore the government and IOCs (independent oil
companies) will continue the risk of working in a legal vacuum."
Despite the absence of an oil law, foreign oil companies
have signed contracts throughout Iraq. But all involved in the
development of Iraq's energy sector would breathe easier if
legal guidelines were in place.
Janabi's comments reflect renewed tensions as thousands of
Sunnis take to the streets to call for Shi'ite Prime Minister
Nuri al-Maliki to step down and to protest that Sunnis are being
Janabi is a member of the Sunni-backed Iraqiya party, which
is opposed to Maliki but is also part of a fragile power-sharing
agreement that splits government posts between Shi'ite, Sunni
and ethnic Kurds.
Kurdistan, claiming constitutional rights, has further upset
the central government by signing deals directly with oil majors
such as Chevron Corp and Exxon Mobil, offering
lucrative production-sharing contracts and better operating
conditions than in the south of the country.
DITCHING THE BLACK LIST
Iraq has been black-listing companies that enter the
northern enclave and has threatened to sue those that buy oil
directly from the Kurdish region, whose shipments it deems to be
smuggling. Such calls have shown no real results, however, as
Kurdish light oil attracts more buyers.
Despite being black-listed, Trafigura is still indirectly
supplying gasoline to Iraq through another firm.
Janabi said abandoning the black list could reinvigorate oil
majors' interests in investing in southern Iraq. In that case,
"IOCs could work to balance their investment portfolios across
the country," he said.
"The priority is to have a federal hydrocarbon law in place
to safeguard the interest of IOCs and the sustainability of the
production plans in Iraq."
Following threats to black-list Exxon Mobil, Maliki's
government appears to be changing tack. It recently offered
Exxon Chief Executive Rex Tillerson incentives to completely
abandon its Kurdish blocks and stay in the south.
Should Exxon abandon the north, the deal could set a
precedent for later licensing rounds in the south as well as
increase competition between Baghdad and Kurdistan to attract
A fifth Iraqi oil licensing round has been in the works but
will be delayed by the unstable political situation, Janabi
"Iraq is in the middle of political and security turmoil.
The fifth licensing round is far from possible before resolving
the current unrest."
While Exxon Mobil's decision on Iraq appears to be a few
days way, the Kurdish Regional Government is already moving
forward with negotiations to award more oil blocks.
The KRG's energy minister, Ashti Hawrami, said last week he
expected to announce new deals with major oil companies in about