An oil law, crucial to easing political divisions in Iraq, is edging closer to approval.
Such a law could help settle potentially explosive disputes among Iraq's ethnic and sectarian communities. The United States has demanded the division of oil reserves in providing further military support to the government.
On Monday, the Iraqi Cabinet approved a draft law that sets rules for sharing the wealth from the World's third largest oil reserves. The law, which will now be sent to the parliament for approval, will also set out terms regulating how foreign oil firms will be able to operate in Iraq.
The law will also restructure the Iraqi National Oil Company (INOC) as an independent holding company with affiliated regional operating companies.
After the law was approved, Iraqi Premier Nuri al-Maliki said: "The benefits of this wealth will form a firm pillar for the unity of Iraqis and consolidate their social structure."
Deputy Prime Minister Barham Salih told Reuters that Iraq's leaders had vowed to have the law enacted by the end of May. "The political leadership have committed to have the law and other associated laws and regulations be implemented by the end of May 2007 -- admittedly tough, and a gruelling schedule, but economic and political imperatives of the country require all of us to rise to the challenge," Salih said.
Last month, agreement was almost reached. However, leaders in the largely autonomous Kurdish region in northern Iraq protested, claiming that they were concerned about relations between regions and Baghdad.
Salih said that as previously agreed, revenues would be put in a central account and distributed according to population. The draft would allow the Kurdish regional government to review existing contracts it has signed with foreign firms to ensure consistency with the terms of the new law, Salih conveyed.
