Iraq Oil: The Devil Is In the Details

In a rare display of comity, the Iraqi cabinet has approved a draft of a law setting guidelines for distribution of oil revenues and foreign investment in the country’s immense and largely untapped oil riches.The draft law allows the central government to distribute oil revenues to the provinces or regions based on population, which could lessen the economic concerns of oil poor Sunnis who fear being cut out of the vast potential oil wealth by the dominant Shiites and Kurds, who control areas of the country where most crude oil reserves lie.

But the devil, as they say, is in the details, including Production Sharing Agreements under which foreign companies -- including Exxon Mobil, Chevron and Shell -- would control all oil production from new Iraqi fields and reap a huge share of the profits for years to come.

Earlier this month, I explored the potential pitfalls of the law here. More here on the cabinet approval.