Official Hydrocarbon law  
 

The Iraq oil law, also referred to as the Iraq hydrocarbon law, is a proposed piece of legislation submitted to the Iraqi Council of Representatives in May 2007.

The Bush administration supposedly hired the consulting firm BearingPoint to help write the law in 2004. The bill was approved by the Iraqi cabinet in February 2007. The Bush administration considers the passage of the law a benchmark for the government of Prime Minister Nuri Kamal al-Maliki.

The new law would authorise production share agreements (PSAs) which guarantees a profit for foreign oil companies. The industry had been completely nationalized by 1972. The government in the 1990s, under the presidency of Saddam Hussein, gave PSAs to Russian and Chinese companies which gave a profit percentage of less than 10 percent.

The central government would distribute remaining oil revenues throughout the nation on a per capita basis. The draft law would allow Iraq's provinces freedom from the central government in giving exploration and production contracts. Iraq's constitution allows governorates to form a semi-independent regions, fully controlling their own natural resources.

The Iraq National Oil Company would have exclusive operational control of just 17 of Iraq’s 80 known oil fields. Normally countries do not have the type of exclusivity that would leave two-thirds of known and unknown fields open to foreign control. However, operational control of the fields does not mean control of the money made from them, and a percentage of the profits will be going into Iraqi tax revenue. Iraq’s oil reserves are believed to be the second largest in the world after Saudi Arabia.

Journalist Pepe Escobar points to the destiny of the Iraq oil law as the crucial point determining the will of the American administrations to withdraw from the Iraq war.
Iraqi Kurdistan , "has already given PSAs to foreign oil companies, and is in favour of the proposed oil law."[2] The region may gain control of oil-rich Kirkuk through a referendum later this year.[2] Nechirvan Barzani, the prime minister of the Kurdistan Regional Government, told Prime Minister Nouri al-Maliki that Kurds would not accept the oil law unless a piece of companion legislation were amended to allow Kurds more freedom in developing fields in their region.[6] Ashti Hawrami, oil minister for the Iraqi Kurdish region, said the Kurds would reject any amendments to the suggested law and that they would go ahead with deals they have already made regardless of the law's passage.