6 POINTS OF CONTENTION BETWEEN BAGHDAD AND ERBIL MAY PLAGUE THE NEW DRAFT OIL AND GAS LAW… WHAT ARE THEY?
Today, economist Nabil Al-Marsoumi revealed 6 differences between the central government of Baghdad and the Kurdistan region that may plague the new draft oil law.
Al-Marsoumi said in a post followed by Al-Sumaria News,
1. Federal Minister of Oil
2. Federal Minister of Finance
3. Federal Minister of Planning
4. Governor of the Central Bank
5. Minister of Natural Resources in the region
6. Governors of three oil-producing provinces that are not affiliated with a region
7. Three experts
Second: Decisions are taken by the majority
while the region sees thatFederal CouncilFor oil and gas, it should include in its membership;
First: It shall include Federal Council for oil and gas, each of:
1. The federal government (ministers of oil, finance, and planning)
2. The regional government (ministers of natural resources, finance, and planning)
3. Governors of oil-producing governorates that are not affiliated with a region
Second: The presidency in the council is periodic
Third: Decisions are taken unanimously.
The draft law stipulates in Article 8 first the following: The Federal Ministry of Oil Management of oil and gas producing fields in Iraq In coordination with the producing region and governorates. As for the vision of the region, it is summarized as follows: The federal government manages the oil and gas extracted from the current fields (which were extracted, developed and commercially produced before the constitution ran out in 2005) with the regional government and the producing provinces that are not organized in a region.
The government of the producing region or provinces shall have the authority concerned with managing oil and gas in the current and future fields (which are the fields from which oil and gas have been extracted, developed, and produced commercially after the constitution runs out). He is the one who grants approval for oil licensing contracts, while the region considers it the competent authority for exploration, development and production contracts, or any other contracts with the contractor who is chosen, and this does not require Federal Council approval.
He also pointed out that “the fourth difference: in Article 16 of the draft law, the ministry is the supreme authority responsible for the obligations of the contractors, while the region believes that the competent authority in the region is responsible for the obligations of the contractors in the contracting areas within the region.”
Al-Marsoumi explained, “The fifth discrepancy: In Article 24 of the draft law, the main pipelines are owned by the federal government, while the region says that the federal government, the regional government, and the producing provinces establish and own pipelines to transport oil and gas.”
He added, “The sixth difference: Although the new draft oil law did not include any article indicating the marketing of oil and the party responsible for it, but as is currently in force and confirmed by the Federal Court, the Ministry of Oil represented by SOMO is the only party responsible for marketing all Iraqi oil, regardless of Its production site, while the territory finds that He sets marketing and sales policies, and the sales process is carried out by marketing companies belonging to the regional government or the producing governorates that are not affiliated with a region.
Despite the economic importance of the Iraqi Oil and Gas Law, which has been awaiting legislation in parliament since 2005, which stipulates that the responsibility for managing the country’s oil fields should be entrusted to a national oil company, which will supervise it. However, the dispute over the issue of managing the fields of the region has prevented it from being voted on for many years, as the law was passed many times during previous parliamentary sessions and was not included in parliamentary laws and legislation.
The stalled oil and gas law in the Iraqi parliament since its first session, in 2005, is one of the most prominent points on which a preliminary agreement was reached between the two governments of Baghdad and Kurdistan.
And on February 15 of last year 2022, the Federal Supreme Court issued a judgment which made unconstitutional of the oil and gas law of the territorial government of 2007, which regulates the oil industry and its extraction in the region, and this ruling came after the territorial government concluded contracts with foreign oil companies. Kurdistan Regional Government refused the Federal Court decision, giving up control over oil exports.