Let’s see Ambassador Crocker try to put a positive spin on this:
A carefully constructed compromise on a draft law governing Iraq’s rich oil fields, agreed to in February after months of arduous talks among Iraqi political groups, appears to have collapsed. The apparent breakdown comes just as Congress and the White House are struggling to find evidence that there is progress toward reconciliation and a functioning government here….
Mr. Shahristani, a senior member of the Arab Shiite coalition that controls the federal government, negotiated the compromise with leaders of the Kurdish and Arab Sunni parties. But since then, the Kurds have pressed forward with a regional version of the law that Mr. Shahristani says is illegal. Many of the Sunnis who supported the original deal have also pulled out in recent months.
The oil law — which would govern how oil fields are developed and managed — is one of several benchmarks that the Bush administration has been pressing the Iraqis to meet as a sign that they are making headway toward creating an effective government.
Again and again in the past year, agreement on the law has been fleetingly close before political and sectarian disagreements have arisen to stall the deal.
The Iraqis’ attempts at oil sharing laws have never been impressive — and have often been suspiciously advantageous for multinational oil companies. But at least there was something, before recently, that the Iraqi government had come together to achieve. Now, even that moderate success is gone.