A carefully constructed compromise on a draft law governing Iraq’s rich oil fields, agreed to in February after months of arduous talks among Iraqi political groups, appears to have collapsed.....The Sunni Arabs who are opposed to decentralized control of oil and more importantly its revenue will continue to exercise their veto over Kurdish oil exports. This veto is the Semtex derived veto of blowing up critical nodes on the northern oil export networks. Developping new fields does nothing for the Kurds if that new oil is sitting in storage tanks in Irbil. It could be shipped overland by truck, but this is a fairly expensive method.
the Kurds have pressed forward with a regional version of the law that Mr. Shahristani says is illegal. Many of the Sunnis who supported the original deal have also pulled out in recent months....
Contributing to the dispute is the decision by the Kurds to begin signing contracts with international oil companies before the federal law is passed. The most recent instance, announced last week on a Kurdish government Web site, was an oil exploration contract with the Hunt Oil Company of Dallas.
The Shi'ite parties in my opinion, really just need to have enough of an illusion of progress to keep the US Army and Marines interested in acting as their anti-Sunni militia. The draft oil law is fundamentally irrelevant to any of the major Shi'ite parties until the southern intra-Shi'ite resource and network fight reaches a definative conclusion. And at that point, even if there is a pre-exisiting law in place governing resource and cash distribution, the winning groups in the South will control either the export terminals or at least the accountants, so Baghdad will get what the Southern winner wants them to get, and not a whole lot more than that.