DINAR REVALUATION REPORT: Five Oil and Gas Laws & the Production-Sharing Contracts are in Parliament: Iraq 2024

 Five Oil and Gas Laws in Parliament: Iraq 2024

As of September 6, 2024, the Iraqi Parliament has been actively involved in the management and regulation of the country’s oil and gas sector, focusing on drafting and amending laws to govern the industry effectively. 1  3  5

Key Laws in Focus

1. Kurdistan Oil and Gas Law No. 22/2007 (KOGL)

The Kurdistan Oil and Gas Law No. 22/2007 (KOGL) has been a cornerstone of the Kurdistan Regional Government’s (KRG) approach to managing oil and gas resources. Established after the adoption of the current Iraqi Constitution in 2006, the law aimed to empower the KRG to develop and utilize the substantial oil and gas reserves within its semi-autonomous region. Following the law’s enactment, the KRG signed over 50 production-sharing contracts (PSCs) with international oil companies (IOCs), marking a significant shift in the region’s participation in the oil sector.  1

2. Law of Identifying and Obtaining Financial Dues to the Kurdistan Region of Iraq from Federal Revenue (Law No. 5 of 2013)

This law establishes the legal framework for addressing outstanding revenue issues between the KRG and the federal government of Iraq, setting out mechanisms for defining and obtaining financial dues owed to the Kurdistan Region since 2004. It authorizes the KRG to sell oil produced in the region to recover unpaid revenues and includes provisions for the KRG’s share of sovereign expenditure revenues and compensation for damages inflicted by the former regime. 2

3. Proposed Amendments to the Kurdistan Region Oil and Gas Law

In June 2022, the Kurdistan Parliament made its first amendments to the Oil and Gas Law of the Kurdistan Region - Iraq, adjusting Article 4 regarding the Kurdistan Region Council on Oil and Gas Affairs. The amendments included adding a sixth member to the council and introducing a new paragraph concerning the council’s meetings and voting system.  5

4. New Oil and Gas Bill

Talks between the KRG and the Iraqi government in August 2023 aimed to draft a new oil and gas bill to resolve the dispute over the Kurdistan region’s constitutional rights on oil and revenue. The bill is intended to address the governance of oil and gas resources in both federal Iraq and the Kurdistan region. 4

5. Moratorium on New Oil and Gas Contracts

The Oil & Energy Committee of Iraq’s parliamentary body is seeking to halt the signing of any further oil and gas contracts until the passing of two key pieces of legislation. This move could impact the Oil Ministry’s plans and delay the country’s oil sector development. 6

Impact and Considerations

The ongoing legislative efforts in Iraq’s Parliament reflect the complex dynamics within the country’s oil and gas sector. These laws and proposed amendments are crucial for addressing revenue distribution, contract rights, and the role of international oil companies in the region. The inclusion of production-sharing contracts in the new oil and gas bill is particularly significant, as it could influence the future of the industry and the jobs it supports.