Sept. 14 (Bloomberg) -- Army General David Petraeus said the U.S. can go forward with plans to remove five Army combat brigades from Iraq by mid-2008 even if the Iraqi government fails to enact laws to reduce sectarian tensions.

The drawdowns can occur so long as Iraq's central government keeps reaching out informally to local leaders, Petraeus said in an interview today at the Pentagon. The Iraqi government's inability to fulfill some benchmarks, such as passing a law to apportion oil revenue, was highlighted in a White House report today.

``It depends where the floundering is,'' said Petraeus, the 54-year-old commander of all U.S. forces in Iraq. ``If the floundering keeps them from capitalizing, as they are now, on these local developments, then we have a real obstacle.''

On the other hand, Petraeus said, a sustained effort by the Shiite-dominated government to reach out to Sunnis in what he called ``the Iraqi way'' will keep the U.S. strategy on track. And the possibility that predominantly Sunni Anbar province has significant oil reserves eventually may make it easier to bridge Iraq's internal divisions, he said.

As an example of the government's outreach, Petraeus cited a trip by Prime Minister Nuri al-Maliki to Tikrit, Saddam Hussein's home town, to discuss requests for help from Sunni leaders. The general said Maliki dipped into a ``big suitcase'' of assistance for the minority Sunnis. ``That's how the system works,'' he said.

Informal Steps

Petraeus, echoing an assessment he gave Congress this week, said he was optimistic that such steps would continue even if broader and more formal measures remained stalled.

The general acknowledged that such informal steps probably wouldn't be enough to resolve political tensions. In particular, he said it would be ``hugely significant'' for the central government to enact a law guaranteeing all regions and ethnic groups a share of the country's revenue from oil production.

The White House report said Iraq's government ``has not made satisfactory progress'' toward passing such a law. It blamed disagreements over the ``appropriate balance between national and regional control'' of exploration and production. The Kurdish regional government in northern Iraq is moving ahead with contracts for oil and natural gas development while the national law remains in limbo.

Petraeus noted the central government is using oil money to fund local and regional governments, mitigating the failure so far to complete the hydrocarbons law.

Possible Oil Prize

He added that Sunni concerns over access to energy revenue may be eased over time because of the possibility that there are untapped oil and gas reserves in Sunni-dominated Anbar province.

Petraeus said these reserves, while potentially ``enormous,'' were still much smaller than those in the Kurdish- dominated north and Shiite-controlled south of the country.

``I don't know how long it would take to even explore it, dig the wells and get the ability to export it or use it,'' Petraeus said.

According to the U.S. Energy Information Administration, geologists and industry consultants estimate that the western and southern deserts of Iraq may contain between 45 billion and 100 billion barrels of recoverable oil. The Energy Department's report on Iraq cites an unspecified Egyptian account this year of a test well drilled in Anbar that ``is flowing at rates equivalent to larger fields'' elsewhere in Iraq.

`Shouldering a Burden'

Asked if U.S. forces would be required to stay in Iraq over the long term to protect the country's oil resources, Petraeus said Iraqi forces are beginning to do that themselves.

``The bulk of the oil being pumped out happens to be coming out of the southern area, with very small U.S. elements down there,'' he said. ``Iraqis are responsible for security of the southern oil fields. That's a case of Iraqis already shouldering a burden.''

A report last week from an independent commission on Iraqi security forces was less sanguine. It said Iraq would be forced to rely on the naval power of the U.S. and its allies ``for the foreseeable future'' to prevent sabotage or terrorist attacks on Iraq's two primary oil terminals.

Withdrawal of Troops

President George W. Bush, acting on Petraeus's recommendation, announced yesterday that he will withdraw about 5,700 U.S. troops by the end of the year and about 30,000 by July. That would return the force level to about 130,000, where it was before Bush ordered a buildup in January. A reason given for the pullback was improved security in Anbar, which Petraeus said was dealt a setback by the murder yesterday of a regional leader.

Petraeus called the assassination of Sheik Sattar Abu Reesha a ``big blow'' to a movement of Sunni tribal leaders who have joined with U.S. forces to oppose al-Qaeda.

``His loss is very significant not just for the Anbaris but also for all Iraqis because he was a senior leader who courageously stood up before the security situation allowed,'' Petraeus said.

Abu Reesha had reached out to Maliki in an effort to develop links to the central government, and had also met with Kurdish and Shiite leaders, Petraeus said.

The benchmarks report issued today in Washington by Bush found that the Iraqi government is making progress toward just nine of 18 goals necessary to achieve a stable and unified nation. ``Political progress at the national level has still been disappointing,'' the White House's review said.

Petraeus agreed, saying there has been ``halting progress at best'' in fulfilling the benchmarks.

To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net; Tony Capaccio in Washington at acapaccio at Bloomberg.net

Last Updated: September 14, 2007 16:11 EDT