The Iraqi cabinet yesterday passed the long-expected draft oil law, a key move necessary to save the economy from further depression.

"This law emerged from our national interests. It will unify all component parts of the Iraqi people," Prime Minister Nuri al-Maliki told reporters, adding that it is a gift from the legislature to all Iraqi people.

The draft law, now sent to the parliament for approval, intends to distribute all oil income among the country's 18 provinces, based on population size, and will allow foreign investors to conduct business within the sector.

Iraq currently has a proven oil reserve of around 120 billion barrels, ranking it third in the world. Most of the country's oil fields are located in the Kurd-controlled north and Shiite-dominated south.

The issue of distribution has restrained Iraq's national reconciliation as the once-empowered Sunni Arabs, most of whom live in resource-poor central and western Iraq, fear they will be marginalized and denied their share of the oil wealth.

Almost all of the Iraqi national revenue is derived from oil sales, despite insurgent attacks on the oil infrastructure.

(Xinhua News Agency February 27, 2007)