The dispute between Baghdad and Erbil over the oil file has been an unresolved issue for more than two decades, and the United States on Wednesday called on the two governments to negotiate this dispute and take advantage of the United Nations mission. who was instructed to help.
The oil and gas law in Iraq, which has been awaiting legislation in Parliament since 2005, stipulates that the responsibility for the management of the country’s oil fields must be entrusted to a national oil company, and under the supervision of a federal council in this matter specializes.
But since 2003, Baghdad and Erbil, the capital of Iraq’s Kurdistan region, have been at odds over the issue of managing the region’s oil fields.
Baghdad says that the region does not authorize actual oil export amounts and does not hand over those amounts to it, while Kurdistan says that exports from oil fields in its territory should be subject to its administration, either in terms of granting licenses for new exploration, managing existing fields, or controlling production and exports For destinations of his choice, or contracting for purchasing and development.
The Kurdistan Oil Act indicates that “the Ministry of Petroleum in the region or whoever it is empowered is responsible for” organizing and supervising oil operations … as well as all related activities, including oil marketing, as well as “negotiation and the conclusion of agreements and the implementation of all licenses, including oil contracts signed by the provincial government.
The law states that the Iraqi government has the right to “participate in the management” of the fields discovered before 2005, but the fields discovered thereafter belong to the regional government.
Renewed reason for disagreement
And the Kurdistan region of Iraq gets a percentage of the Iraqi budget that the regional government can spend on the service, operational and investment sectors, without referring to Baghdad. The federal budget is also responsible for paying the salaries of the region’s employees.
Journalist Ahmed Hussein says that “the Kurdistan region is obliged by budget laws to hand over oil quotas to the federal government, but the region has not complied with these quotas in any year since 2005.”
Hussein adds on the “Al-Hurra” website that “the prime minister in the 2014-2018 government, Haider al-Abadi, was the first to use the salaries of Kurdish workers to put pressure on the regional government to increase its quotas. to come. “
There are no government statistics on oil exported from the Kurdistan region, but the Iraqi oil ministry published an analysis last May stating that the regional government had committed “legal and procedural violations” in oil sales that caused significant losses.
The analysis of the publication on the ministry’s website states: “The financial returns for the regional government do not exceed 80 percent on average after deducting production costs (the cost of producing a barrel of oil), while the financial returns for the first and second licensing rounds (introduced by Baghdad) range from 94.5 percent to 96.5 percent, and that the cost of production is equal to (4) times the cost of production in the licensing rounds of the Federal Oil Ministry.
The ministry said, “On the other hand, the regional government itself has signed a contractual commitment through production sharing contracts to exempt contractors from tax and allowed them to inflate their profits without imposing any kind of tax. or to share those inflated profits, especially when oil prices have risen worldwide. “
She added: “The Ministry of Oil also wants to make it clear that the region has not complied with the quotas allocated to Iraq under the” OPEC “agreements, which are the quantities of oil allocated to Iraq from the central and southern fields adversely affected, and thus negatively impacted the financial returns of the federal government, despite bearing its burdens by securing the salaries of its people in the area.
The regional government spokesman did not respond to calls from the “Al-Hurra” website to ask about Erbil’s position on the issue, and members of the Kurdistan Democratic Party ruling in the region did not respond to the website. ‘s questions did not respond.
Journalist Ahmed Hussein says that “the absence of transparency and numbers of speculation prevail in a large and sensitive issue,” noting that “the need of the political clashing blocs in Baghdad for the votes of Kurdish MPs makes governments always make revelations about “What’s happening overlook the region’s oil from 2005 until now?”
Oil and Gas Act
Last April, the Iraqi Federal Court ruled that the Kurdistan Oil Act, which had been in place and effective since 2007, was “unconstitutional”.
Following the court’s ruling, the oil ministry, according to Reuters, has appointed international law firm Cleary Gottlieb Steen and Hamilton to reach out to some oil and gas companies operating in the Kurdistan region “to start talks to bring operations into line with applicable Iraqi law. “
The efforts apparently led to the withdrawal of the “Schlumberger” oilfield services company, Monday from the Kurdistan region, in accordance with the ruling of the Federal Court.
A US oil company withdraws from the Kurdistan region in accordance with the decision of the “Federation”
The US company, “Schlumberger” for oil field services, announced on Monday its withdrawal from the Kurdistan region, in accordance with the ruling of the Federal Court.
This is the first time that companies operating in the region have shown a commitment of this nature to Baghdad’s decisions.
According to Reuters, the oil ministry has said it will take legal action to ensure that companies that export the region’s oil comply with Baghdad’s decisions. A source told Reuters other companies had received a direct letter from the oil minister.
But the Ministry of Natural Resources in the Kurdistan region of Iraq said the ministry’s actions were “illegal”.
A ministerial statement issued on June 13 said: “The (Karkh) Commercial Court in Baghdad has sued the international companies operating in the Kurdistan region at the request of the Iraqi Oil Minister. The companies are (DNO), (DNO), ( Western Zagros) and (H. KN, Sharman, Genel Energy, Addax and Gulf Keystone, who conduct their business in accordance with the Kurdistan Regional Oil and Gas Act No. 22 of 2007 approved by the Kurdistan Parliament in accordance with the provisions of the Iraqi Constitution.
The statement said the summons “represents the latest series of illegal actions taken by the oil minister in the caretaker government in Baghdad, and these illegal practices appear to be based on the verdict issued by a court in Baghdad itself. the “Federal Supreme Court. Court “, issued on 15 February 2022. A politically motivated decision aimed at repealing the 2007 Kurdistan Oil and Gas Act, while no court in Baghdad has the authority to make such a decision.
The ministry accused the Federal Court of being “unconstitutional”.
It accused the Federal Ministry of Petroleum of “intimidating and harassing companies operating in the Kurdistan region.”
On June 5, the Minister of Natural Resources in the Kurdistan Regional Government filed a civil lawsuit against the Minister of Oil in the Federal Government, saying that “the Minister of Oil in the Federal Government is responsible for sending messages and e-mails to to send these companies with the aim of intimidating them and interfering with their rights regarding contracts concluded with the Regional Government.According to the statement.
Washington on Tuesday called on Baghdad and Erbil to resolve their differences, especially oil.
A State Department spokesman told Al-Hurra that “the Iraqi government and the Kurdistan Regional Government should sit down at the negotiating table to reach a mutually acceptable solution to the oil issue and to avoid taking steps that exacerbate tensions. . ”
The official, who preferred not to be named, added that “the new mandate of the United Nations Assistance Mission to Iraq (UNAMI) specifically gives it a mandate to help the parties achieve this.”
Iraqi oil, which is OPEC’s second largest oil exporter, is of particular importance in the light of current world conditions, as the conflict in Ukraine and the repercussions of the Corona virus have led to a historic rise in crude oil prices.
“The Kurds did not want to pass the oil and gas law, and took advantage of a constitutional clause that overrides the region’s constitutions over the exclusive powers of the government, which they have enacted according to their own law,” said analyst and politician kenner, Muhammad Nana ‘.
Nanaa added to Al-Hurra: “But now, following the Federal Court’s ruling, the region needs legal coverage to conclude agreements with international companies, which have begun to fear getting into oil and gas in the Kurdistan region. to invest, especially after the armed groups targeted the sites of the “Dana Gas” company in conjunction with the decision The Federal Court of the illegality of the law of the region and its call to subject the oil wealth to the federal government according to articles 110 and 111 of the Constitution.
A field operated by the Emirati “Dana Gas” company in Sulaymaniyah, in the Kurdistan region, has been the subject of three missile attacks in the past week.
The first missile strikes on oil facilities in the region were recorded in April, and then in May they targeted the Kawergosk oil refinery, one of the largest refineries in the oil-rich region northwest of Erbil, according to the Kurdish Rudaw news agency.
The head of the Kurdistan Democratic Party’s parliamentary bloc, Vian Khalil, has called for oil and gas legislation.
Her calls come after an initiative by the “coordinating framework of the Shiite forces” to resolve the current political stalemate in the country, which included a similar call for legislation into law.
Analyst Nanaa says, “The closest intuition is that the law will be passed soon after the formation of the government, but provided that the Kurdistan Democratic Party is in it, which means that there are guaranteed prior agreements for the region in the process of the drafting the provisions of the new law. “
However, Kifah Mahmoud, a political analyst and adviser to the former president of Iraqi Kurdistan, Massoud Barzani, told Al-Hurra that “in the current situation, the legislation is very difficult due to serious political rivalry, and the failure to a national government dealing with crisis files with constitutional constants under the umbrella of interests. ” Iraq, its people and its federal system.
He added: “With these repercussions, I do not envisage reaching radical solutions, and all that can be done is to shift the problems and patch them up until the political scene is seriously changed.”