Late last moth,Iraq’s parliament passed, with a solid majority, a set of major revisions to its 2008 Provincial Powers Law. These, among other things, boost the amount governorates receive for each barrel produced in their province from $1/B to $5/B. The law has the clear potential, if implemented, to radically change the balance of power between Baghdad and Iraq’s regions and impact on oil policy and development.

The changes, proposed on 23 June, mark a seismic shift in the way Iraq is governed. “The provincial council is the legislative and regulatory authority in the province” with “a legal personality and financial independence,” reads Article 2. And their authority trumps that of Baghdad. Article 6 states: “In the event of disagreement, priority will be given to the provincial council’s decision.” In addition to $5/B for oil produced, provinces will get $5/B for oil refined, and $5/B for every 150 cu ms of gas produced (see table for MEES estimates of the resultant end-2015 provincial oil revenues). (CONTINUED - 1618 WORDS)