Iraq provinces slice oil pie

Iraq's cabinet has approved changes to a landmark energy law which they hope will unite the country's warring factions. The law aims to regulate the distribution of revenues from crude oil exports and open the sector to foreign investors.

With ownership of oil reserves being a subject of fierce debate among leaders, the move marks a new step in regulating how wealth from the oil-rich nation will be shared between sectarian and ethnic groups. It is also one of several pieces of benchmark legislation the U.S. is calling on to promote reconciliation.

Most of Iraq's oil reserves are in the Kurdish North and Shi'ite South regions which are flush with oil and a big draw for western producers and explorers. The bill will allow regions and provinces to hold talks with oil firms, while approval of contracts would still have to come from central government. It is vital for the country in its attempts to boost its oil output, attract investment from foreign firms, and rebuild its tattered economy.

First approved in February this year, it was initially blocked by several powerful factions which expressed reservations about the text. Now that cabinet has approved the changes, the Iraqi parliament will begin on Wednesday to debate final approval of the key law.