LONDON -(Dow Jones)- The semi-autonomous Kurdish government in Northern Iraq Friday called on the Iraqi government to take a market-oriented approach to crafting contracts with foreign oil companies.
"It is vital that the Federal Government adopt the same market-friendly approach that the KRG has been using in its contracts," Kurdish Regional Government Minister of Natural Resources Ashti Hawrami said in a statement.
The statement suggests that sizable differences remain between the two sides on critical parts of Iraq's hydrocarbons law despite the cabinet having approved a preliminary draft more than a week ago. That vote was taken with all the country's main ethnic groups.
Hawrami said the regional government was prepared "to step down" from its constitutional rights and share management of Iraq's hydrocarbons with the federal government, but said it was critical that the federal government "is doing all it can to attract new investment to Iraq."
The country's independent Oil and Energy Committee still needs to agree on the model to be used for oil contracts and guidelines for setting contract terms, Hawrami said.
The committee must prepare four annexes from the draft law on issues like how oil revenues will be distributed between Iraq's population and which entities will manage particular oil fields. Those annexes must be agreed on by Iraq's government and the KRG before the draft oil law can be submitted to parliament for a vote.
Iraqi and Kurdish officials hope the draft law can be put to a parliamentary vote for approval in May.