Today, September 3, 2023, economist Nabil Al-Marsoumi disclosed six gaps between Baghdad’s federal government and the Kurdistan region that might undermine the new draft oil legislation.
“The first difference: Article 5 of the new draft oil and gas law stipulates the following,” Al-Marsoumi wrote in a post that was picked up by Al-Sumaria News.
- Federal Oil Minister
- 2. Federal Finance Minister
- 3. Federal Planning Minister
- 4. Central Bank Governor
- The region’s Minister of Natural Resources
- Governors of three non-regional oil-producing provinces
- Three experts
Second, although the area observes that the Federal CouncilFor oil and gas, it should contain the following members:
First, it must include the Federal Council for oil and gas, as well as each of the following:
- The federal government (ministers in charge of energy, finance, and planning)
- The regional government (natural resources, finance, and planning ministries)
- Governors of non-regionally connected oil-producing governorates
Second, the president of the council is rotated on a regular basis. Third, decisions are made by consensus.
Expert, “The second distinction is that the draft law initially states in Article 8: The Federal Ministry of Oil manages all oil and gas producing fields in Iraq.Working in collaboration with the producing region and governorates. The region’s vision may be summarized as follows: The federal government, in collaboration with the regional administration and the producing provinces that are not grouped in a region, controls the oil and gas extracted from the present fields (which were extracted, developed, and economically produced before the constitution expired in 2005).
The administration of the producing region or provinces shall have control over oil and gas in present and future fields (fields from which oil and gas have been extracted, developed, and commercially produced after the constitution expires).The Federal CouncilHe is the one who approves oil license contracts, although the region deems it the responsible authority for exploration, development, and production contracts, as well as any other contracts with the chosen contractor, and thus does not require permission from the Federal Council.
He also mentioned “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.”
“The fifth discrepancy: In Article 24 of the draft law, the main pipelines are owned by the federal government,” Al-Marsoumi stated, “while the region says that the federal government, the regional government, and the producing provinces establish and own pipelines to transport oil and gas.”
“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, 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,” he added.He establishes marketing and sales rules, and the sales process is carried out by marketing organizations linked with the regional government or non-regional producing governorates.
Despite the economic importance of the Iraqi Oil and Gas Law, which has been pending legislative approval in parliament since 2005, the duty for administering the country’s oil resources should be handed to a national oil firm, which will manage it.BaghdadHowever, there is a disagreement on how to manage the region’s fieldsKurdistan Iraq.Oil has kept it from being voted on for many years since the law has been approved several times during past parliamentary sessions and is not included in legislative laws and legislation.
The blocked oil and gas bill in the Iraqi parliament since its first session in 2005 is one of the most visible issues on which the two administrations achieved a tentative agreement.Baghdad and the Kurdish territories.
And on February 15, 2022, the Federal Supreme Court issued a ruling declaring the oil and gas law of the territorial government of 2007, which regulates the oil industry and its extraction in the region, unconstitutional, and this ruling came after the territorial government signed contracts with foreign oil companies. I resisted the Kurdistan Regional Government’s Federal Court judgment to relinquish control of oil exports.