The Iraqi parliament is close to sealing a consensus that would somehow give each Iraqi citizen a share of the revenues generated from the exports of the country's rich oil resources.
Contrary to recent reports that appeared in various media outlets, most of those who will benefit from this new development are the population in the regions of Iraq, where most of the big crude oil reserves are being extracted for domestic consumption and exports.
In a CNN broadcast today, Hamid al-Bayati, Iraqi permanent representative to U.N., says the parliament is expected to decide within a week's time on the oil sharing agreement that will give the regional government a good share of the oil revenues.
This is contrary to reports that the big oil companies will have a say in the extraction of the crude reserves in Iraq. In this way, the people in the region can make use of the revenues from the sale of crude oil, he said.
Recently, a law was proposed to give at least five major oil companies worldwide 30 years to extract crude oil in Iraq. But the wind blow has changed direction at this time. And a meeting at the White House is in the process of discussing money for Iraq.
Studies showed that Iraq has at least 115 billion barrels in crude reserves that are scattered in at least 80 oil fields in Iraq. This makes the country the world's second largest producer of oil. However, only 17 of these fields are currently operating, particularly in Kirkuk in the north and Rumaila in the south.
"Substantial proven reserves exist, and there are like more resources awaiting discovery. But oil production has been slow to fully recover during the post-Saddam period, and many obstacles stand in the way of achieving a stable export flow," explains Lawrence Kumins, a specialist in Energy Policy Resources, Science and Industry Division, in a CRS report to Congress in April 2006.
If Iraq's crude reserves are intensively developed, it could easily support much greater production, Kumins said. Citing a Department of Energy report, he said that once this is done, Iraq's oil output could triple, even rivaling that of Saudi Arabia's production.
Early in the first quarter last year, Iraq exported about 1.05 million barrels of oil per day in January, generating total estimated revenues of US$1.84 billion. The following month, it exported 1.47 mbd, valued at US$2.16 billion; and in March, 1.41 mbd, valued at US$1.82 billion.
"Domestic consumption averaged about 500,000 barrels per day before the most recent conflict, but current internal demand may be at least 100,000 b/d less. The domestic consumption picture is clouded by the refineries' inability to produce needed fuels, making it necessary to import gasoline and propane from other countries," he said in a CRS report.
For the entire year that the Coalition Provisional Authority has been in power in Iraq, it has been impossible to tell with any accuracy what the CPA has been doing with Iraq's money,' said Helen Collinson, head of policy at Christian Aid.
Resolution 1483 of May 2003 said that Iraq's oil revenues should be paid into the Development Fund for Iraq (DFI), that this money should be spent in the interests of the Iraqi people, and be independently audited. But it took until April 2004 to appoint an auditor - leaving only a matter of weeks to go through the books.
The Christian Aid cited early reports of the audit indicate strong criticisms of the CPA's handling of Iraq's money, where nearly $2 billion of Iraq's money has been hastily allocated. The new Iraqi government will be committed to these spending decisions.
The lack of anything more than basic information about the CPA's spending of Iraq's funds is in stark contrast to the information on the US$18.4 billion of US taxpayers' money that is also being spent in Iraq. No less than four separate audits of the US funds are underway, the Christian Aid official explained.
"All this sets a very bad precedent for the incoming Iraqi government. 'Too many oil-rich countries go down the road of unaccountable government, riches for the few, and poverty for the many. Iraq can avoid this route, but only by ensuring transparency," said Ms Collinson.
"Iraq's oil represents huge potential wealth. With half of the population still unemployed, the Iraqi people need to be able to see that the oil revenues are being spent to alleviate poverty and to improve their lives," the Christian Aid official added.