According to The New York Times, Iraqi officials have submitted a draft of a new petroleum law to the Cabinet for its approval. The New York Times focuses entirely on the provisions that would divide the oil among the different provinces, but equally important to Iraqis and to American oil companies are the provisions granting foreign companies an entree into Iraqi oil. The law would supersede Law 80, which a new Iraqi government, having ousted the British, passed in 1961. Law 80 nationalized almost all of Iraqi oil holdings. The new law would retain Iraqi ownership of its oil, but allow the federal and regional government to sign production sharing agreements (PSAs) with foreign companies that would give them control of exploration and production for up to twenty years. After making back their initial investment, they would have to pay a certain percentage of their profits to the Iraqi government. Most of Iraq's neighbors only allow foreign investment under service contracts that do not grant foreign companies control and quasi-ownership of the oil that is produced. A leaked version of the law, translated into English, has already appeared on the web. To someone like myself who is comparable unversed in petroleum law, it is hard to appreciate the provisions, which are couched in impenetrable jargon. But a few features stand out. Power over deciding foreign contracts seems to be vested primarily with something the Federal Oil and Gas Council, which will include representatives from the federal and regional government, the Iraqi national bank, outside experts, and "executive managers" from "related petroleum companies." At several points in the document, control by the oil ministry is stipulated but then crossed out in favor of this body, which appears to include representatives of foreign oil companies. The document stresses "transparency," but full disclosure of contract provisions appears limited. At one point, a provision granted that two months after a contract's approval "the text of the contract shall be made public" is crossed out. Contracts are to recorded in English and Arabic, but as one Iraqi oil expert notes, no priority is given to Arabic as the primary language in the case of disputes. Some oil experts question whether it is appropriate to adopt a new oil law while Iraq is under foreign occupation. Iraq's first oil law, passed in 1925 under British occupation, was eventually revoked. In addition, as long as the country is in the throes of civil war, few oil companies are likely to make significant investments in exploring for or developing reserves. But the Bush administration, eager to show something for four years of reaping death and destruction, is pushing the Iraqis to get the new law through the Iraqi cabinent and parliament. --John B. Judis