Barzani Goes to Baghdad: Trouble in Kurdish Oil and Gas

By Douglas A. Ollivant for War on the Rocks. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Barzani Goes to Baghdad: Trouble in the Kurdish Oil and Gas Sector

A recent Federal Supreme Court decision in Iraq has put a legal stake in the heart of Kurdistan's oil and gas sector - the financial lifeline of the region.

Only one man has the power to fix this. Masoud Barzani - the 75 year-old former president and de facto patriarch of the Kurdistan region - must go to Baghdad and cut a political deal.

Click here to read the full article.

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Three Oilfield Services Companies to Leave Kurdistan

By John Lee.

The Iraqi Ministry of Oil has confirmed reports that three major US-based oilfield services companies have informed the Ministry that they will refrain from entering into new projects Iraqi Kurdistan.

It says that Schlumberger, Baker Hughes and Halliburton have made the commitment to comply with the Federal Supreme Court ruling that oil contracts signed with the Kurdistan Regional Government (KRG) are unconstitutional.

The ministry adds that the companies are now in the process of winding up and terminating their existing tenders and contracts in the Kurdistan Region of Iraq.

(Source: Ministry of Oil)

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The KRG Turns Thirty: The Future of US-Kurdish Relations (Part III)

By James Jeffrey, Matthew Amitrano and Bilal Wahab for the Washington Institute for Near East Policy. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

The KRG Turns Thirty: The Future of U.S.-Kurdish Relations in Iraq

Three experts evaluate the KRG's oil and gas industry and discuss the growing urgency of resolving its disputes with Baghdad.

Click here to see the full article and video.

The post The KRG Turns Thirty: The Future of US-Kurdish Relations (Part III) first appeared on Iraq Business News.

Schlumberger “Withdraws from Iraqi Kurdistan”

By John Lee.

Schlumberger has reportedly announced its withdrawal from Iraqi Kurdistan, as a result of the Federal Supreme Court ruling that oil contracts signed with the Kurdistan Regional Government (KRG) are unconstitutional.

Sources told the official Iraqi News Agency that the US-based oilfield services company "sent a letter with an official document to the Iraqi Oil Ministry in its commitment to Federal Court Decision No. 59, which includes not dealing with the Kurdistan region regarding the oil file."

The news agency adds that a similar decision was taken previously by Baker Hughes.

Schlumberger has been active at several fields in southern Iraq, drilling 37 oil wells in the Al-Zubair field in Basra, drilling 96 horizontal and diagonal oil wells at the West Qurna 1 field, and drilling 40 new wells at Majnoon oilfield.

(Source: Iraqi News Agency)

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The Necessary US Role in Fixing Baghdad-Kurdistan Energy Dispute

By Michael Knights, for the Washington Institute for Near East Policy. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

The Necessary U.S. Role in Fixing the Baghdad-Kurdistan Energy Dispute

On February 15, 2022, Iraq's Federal Supreme Court ruled that the 2007 oil and gas law for the Kurdistan Region was unconstitutional, requiring a review of numerous production sharing contracts and oil sales agreements.

If the case prevents oil exports via Iraqi Kurdistan, then the world market will almost immediately lose 500,000 barrels per day, triggering higher oil prices, expanded windfalls for Russia and Iran, the collapse of Iraqi Kurdistan's economy, and a dangerous turn in Baghdad's ties with Erbil and with Ankara.

In this timely Policy Note, Iraq expert Michael Knights calls for the United States to act with other concerned states to resolve the Baghdad-Erbil energy crisis. In doing so, he categorizes the sub-issues of FSC implementation on a spectrum from higher to lower consensus, and explains both sides' views in an unvarnished, direct manner.

A targeted intervention by the United States and its partners, the author argues, could guide the dispute toward a long-overdue resolution that greatly aids U.S. interests and the global effort to find a substitute for Russian and Iranian oil and gas.

Click here to read the full report.

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KRG files Civil suit against Baghdad Minister of Oil

By John Lee.

The Minister of Natural Resources of the Kurdistan Regional Government (KRG) has filed a civil suit against the Baghdad Minister of Oil, accusing him of sending emails and letters with the intention of intimidating international oil companies (IOCs) and interfering with the contractual rights of the IOCs and the KRG.

The KRG has also filed a criminal complaint against a Director General in the Baghdad Ministry of Oil for allegedly abusing his power and position by intimidating and harassing the IOCs working in the Kurdistan Region of Iraq.

This follows a series of summonses issued to the IOCs by a court in Baghdad, relating to their operations in Kurdistan Region.

Full statement from the KRG:

On 19 May 2022, a commercial court sitting in Al Karkh, Baghdad, acted at the request of the Minister of Oil in Baghdad and purported to issue summonses to international oil companies (IOCs) operating within the Kurdistan Region of Iraq. Those IOCs - which include Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran, and WesternZagros - operate in the Kurdistan Region in accordance with the Kurdistan Region's Oil and Gas Law (No. 22 of 2007), which was issued by the Kurdistan Regional Government in accordance with its powers under the Constitution of Iraq.

These court summonses are the latest in a series of illegal actions taken by the Minister of Oil and his staff under the current caretaker government in Baghdad. These illegal actions are apparently based upon a ruling by a court in Baghdad that calls itself the "Federal Supreme Court". This so-called "Federal Supreme Court" issued a politically motivated decision on 15 February 2022, which purported to declare the 2007 Oil and Gas Law void.

No court in Baghdad has the authority to make such a declaration. On 28 February 2022, the President of the Kurdistan Region, together with the presidents of the legislative, executive, and judicial branches of the Kurdistan Regional Government, issued a statement rejecting the 15 February decision. On 4 June 2022, the Judicial Council, the highest judicial institution in the Kurdistan Region, issued a statement upholding the validity of the 2007 Oil and Gas Law. The Council noted that Article 92(2) of the Constitution of Iraq requires that the Iraqi Council of Representatives pass a law to establish an Iraqi Federal Supreme Court. No such law has ever been enacted. Iraq, therefore, does not have a constitutionally established Federal Supreme Court. The court that issued the 15 February 2022 opinion purporting to invalidate the 2007 Oil and Gas Law has no constitutional authority to do so. On the contrary, the issuance of the 2007 Oil and Gas Law was entirely authorised under the Constitution of Iraq. As such, legally, the Oil and Gas Law remains in full force.

On 2 June 2022, the Kurdistan Regional Government filed a criminal complaint against a Director General in the Baghdad Ministry of Oil for abusing his power and position by intimidating and harassing the IOCs working in the Kurdistan Region of Iraq. In the view of the Kurdistan Regional Government, emails and letters sent to the IOCs undertaking work in the Kurdistan Region by that Director General were sent with the intention of intimidating the IOCs and interfering with the contractual rights of the IOCs and the Kurdistan Regional Government. The contracts entered into between the IOCs and the Kurdistan Regional Government are entirely in accordance with the 2007 Oil and Gas Law.

On 5 June 2022, the Erbil Court of Investigation ruled that the lawsuits filed in the Al Karkh commercial court against the IOCs must be brought to the Erbil Court to be examined as evidence in this criminal complaint. The Erbil Court also ruled that any lawsuits in the Al Karkh court must be delayed for this purpose, and that named criminal defendants, including the Baghdad Minister of Oil, must attend the criminal hearing in Erbil on 22 June 2022. Iraqi law (Article 26 of Criminal Procedural Law No. 23 of the year 1979) requires that civil proceedings cannot take place while a related criminal investigation is underway. In addition, Article 38 of Civil Procedural Law No. 83 of the year 1969 states that any civil proceeding against the IOCs must take place in the Kurdistan Region, where the IOCs are registered and operate.

Furthermore, on 5 June 2022 the Minister of Natural Resources of the Kurdistan Regional Government filed a civil suit against the Baghdad Minister of Oil. In the view of the Kurdistan Regional Government, the Minister is liable under applicable civil law provisions for sending emails and letters with the intention of intimidating the IOCs and interfering with the contractual rights of the IOCs and the Kurdistan Regional Government.

(Source: KRG Ministry of Natural Resources)

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KRG Judicial Council disputes Supreme Court ruling over Oil

By John Lee.

The Judicial Council of Kurdistan Region of Iraq has issued a statement saying that the provisions of its oil law (Law No. 22, 2007) do not violate the Iraqi Constitution and therefore should be recognized as "standing laws".

The statement follows months of dispute between Baghdad and Erbil regarding control of the energy resources in Iraqi Kurdistan, with Iraq's Federal Supreme Court ruling in February that sales of oil and gas by the Kurdistan Regional Government (KRG), independently of the central government in Baghdad, were unconstitutional.

Full statement from KRG:

"The Kurdistan Regional Government's tenure on the issue of oil and gas exploration on its territory is in accordance with the 2005 Iraqi Constitution. The provisions of Law No. 22, 2007, issued by the Kurdistan Regional Parliament, do not violate the Iraqi Constitution and therefore should be recognized as standing laws.

"The oil and gas sector do not fall under the exclusive purview of the Federal Government of Iraq as stated in Article 110 of the Iraqi Constitution, underpinned by Article 112 of the Iraqi Constitution which states the Federal Government is to manage oil and gas exploration of discovered fields, in conjunction with regional governments and oil-producing provinces. Of that, revenues are supposed to be distributed equally among the population of Iraq.

"Article 112 refers to existing oil wells and fields prior to the ratification of the Constitution in 2005. As such, oil fields discovered in the Kurdistan Region since 2005 fall under the jurisdiction of the Kurdistan Region and the Kurdistan Regional Government. Accordingly, the texts of the Kurdistan Regional Government's Oil and Gas Law No. 22, 2007, remain in line with the provisions of the Iraqi Constitution.

"Article 92(2) of the Constitution of Iraq requires that the Iraqi Council of Representatives pass a law to establish an Iraqi Federal Supreme Court. No such law has to date been enacted. Iraq, therefore, does not have a constitutionally established Federal Supreme Court. As such, the court that issued the 15 February 2022 opinion purporting to invalidate the Oil and Gas Law (No.22 of 2007) lacks the constitutional authority to do so and, consequentially, the Oil and Gas Law remains in full force as per the Iraqi Constitution."

Click here to view document from Judicial Council.

(Source: KRG)

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Dispute over Iraqi Kurdistan’s Energy Resources ramps up

By Haider Ibrahim for Al Monitor. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Dispute over Iraqi Kurdistan's energy resources ramps up

The Iraqi Ministry of Oil has announced plans to establish a new oil company for the Kurdistan Region.

Click here to read the full article.

The post Dispute over Iraqi Kurdistan's Energy Resources ramps up first appeared on Iraq Business News.

KRG to continue Oil Negotiations with Baghdad

By John Lee.

The KRG's Council of Ministers held its weekly meeting on Wednesday, led by Prime Minister Masrour Barzani.

Referring to the recent round of discussions to resolve the dispute over oil sales between Erbil and Baghdad, the Council stressed the importance of continuing to defend the Kurdistan Region's constitutional rights within Iraq.

It added that negotiations with Baghdad will continue until a mutually acceptable agreement is reached concerning the Region's oil and gas industry.

With no final agreement having yet been reached, the Council added that, while they regard the situation as a violation of the Iraqi oil and gas law, contractual obligations to oil companies currently engaged in the Region will be fulfilled regardless.

(Source: KRG)

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Baghdad, Erbil conclude First Round of Talks on Oil

By John Lee.

The Iraqi federal government in Baghdad and the Kurdistan Regional Government (KRG) have concluded a first round of talks to discuss the management of the Kurdistan region's oil and gas resources.

The meeting follows the ruling by a federal court in February that exports of oil and gas from the Kurdistan region were unconstitutional.

After the meeting, Baghdad's Ministry of Oil has said that it has proposed that existing oil contracts in the region be transferred to a new company, to be set up in Erbil but owned by the federal authority. 

Revenues from sales would be lodged to an escrow account at an international bank, owned by the Ministry of Finance.

(Source: Ministry of Oil)

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