Iraq Parliament approves law on oil refineries

By Reuters, July 24, 2007

BAGHDAD - Iraq's parliament on Tuesday approved a draft law that opens the way for foreign companies to build and operate oil refineries in the country.

According to the law, regional governments and provincial authorities will be able to deal individually with foreign companies, sign contracts and award licences for the construction of refineries.

The Law on Investing and Refining Crude Oil is separate from a draft hydrocarbons law that will govern overall exploration and production and which is seen as crucial to bridging the deep sectarian divide in Iraq.

The draft hydrocarbon law has been submitted to parliament but has yet to be debated by the full legislature. Iraqi television showed parliamentarians approving the refining law.

The Iraqi Oil Ministry should supply crude oil to the investing companies according to export price of Iraqi crude, minus the cost of moving the oil to the nearest delivery point to the refinery and a one percent discount, the laws says.

Investing companies have the right to set the prices of refined oil, the law says, and sell the refined oil both within Iraq and externally.

Investing companies will be able to use Iraqi storage, port and pipeline facilities for export, according to contracts to be signed by the two parties.

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