Deputy PM says Iraq some way off oil law agreement

LONDON (Reuters) - Iraq's government has the political majority to pass a long-awaited oil law but will hold off until broader acceptance has been reached, which could take some time, Deputy Prime Minister Barham Salih said on Wednesday.

The country's central government agreed on a draft oil law early this year, under which control and revenue from Iraq's oil reserves are to be shared among Baghdad and the provinces. But the law has since been stalled by political infighting.

"Most of the elements of the oil law are in place and if we were to decide to go to parliament and...present it any time soon, we probably can muster the political majority it needs to pass," Salih said.

"But...we want this law to unify Iraqis, not to divide Iraqis. We will not want this law to pass (with) 51 percent of the vote. We have to have broad acceptance of this law and we have some work to do in that regard," he added, during a discussion at international affairs think tank Chatham House.

Frustrated by delays and disagreements over amendments to the law, the Kurdish Regional Government (KRG) approved its own oil law in August and has signed several contracts. In response, Iraq's Oil Minister Hussain al-Shahristani has repeatedly said the contracts are illegal.

Asked whether he considered the KRG contracts to be legitimate, Salih, a Kurd, said: "It is not up to the ministry of oil to decide the legality of such contracts, it is for the constitutional court in Iraq to decide the legality or illegality of such contracts."

Describing the oil law as "like a rollercoaster", Salih said he believed Iraq could still succeed at courting investment from abroad in its oil sector, despite all the existing problems.

"The time has come for us to opt for a serious effort at drawing international investment in the Iraqi oil sector. We are still falling very, very short of the potential of Iraq in terms of production and export levels," he said.

"Iraq, I believe, can do this thing. The way oil has been managed in Iraq has been no less than a disaster."