The parliament of the northern Iraqi Kurdistan region last week amended the region’s oil and gas law, further complicating tensions with the Iraqi federal government that sees the region’s oil sector as illegal.
Iraq's Supreme Federal Court ruled in February that Kurdistan's Oil and Gas Law No. 22 passed by the Kurdistan parliament in 2007 to regulate its oil and gas industry is unconstitutional. The court then ordered the Iraqi government to take measures and force the Kurdish authorities to hand over their crude supplies to the Iraqi federal government. Kurdish authorities rejected the decision and described it as "politically motivated", saying the court's ruling was not aligned with the Iraqi constitution.
The parliament on Wednesday and with the vote of 71 MPs passed the first amendment of the Kurdistan region’s oil and gas law No. (22) for the year 2007. The amendment draft was sent by the KRG to the parliament.
“Only article four of the law, which is related to the structure of the Kurdistan region’s supreme council for oil and gas, was amended, accordingly the chief of staff of the Kurdistan Regional Government (KRG) council of ministers added to council,” Ali Hama-Salih, head of the energy and natural resources parliamentary committee told The New Arab.
“The amendment lacks defining the region’s oil policy and the establishment of key institutions in the oil and gas sector.”
With the new amendment, the council will become a six-member assembly, and the new member is from the ruling Kurdistan Democratic Party (KDP). Accordingly, the KDP will have three members, the Patriotic Union of Kurdistan (PUK) two members, and the Movement for Change (Gorran) will have one member.
“We did not vote for the amendment, since first we did not deem it necessary. During the past four years the region’s supreme council for oil and gas did not convene, it was supposed to convene and send its report to the Kurdistan parliament,” Gulstan Saeed, chairwoman of Gorran’s parliamentary bloc told TNA in a phone call.
“Secondly, the amendment makes the KDP the absolute decision maker in the council as the head of the council, whose vote will be decisive in case of equal votes, is from the KDP. Thus, the KDP can make any decision in the council even if members from PUK and Gorran did not vote or attend.”
Saeed said that amending the law is “a kind of challenge” to the decision by the ISFC, and it would increase risks to the region’s oil and gas sector.
TNA contacted Abbas Fatah, deputy head of the parliament’s legal committee, but he declined to answer some questions or speak on the law.
TNA also contacted Asim Jihad, the spokesperson of the Iraqi oil ministry, but he was not immediately available to comment.
The Iraqi oil ministry recently suggested that international oil companies will no longer sign contracts with the KRG ministry of natural resources. However, a new oil company based in Erbil and under the supervision of the Iraqi oil ministry will be the only entity to be able to sign contracts.
The KRG officials have rejected these suggestions.
Last month the Iraqi oil ministry threatened international oil companies working in the Kurdistan region of blacklisting if they do not comply with the ISFC ruling. Consequently, three major US oil companies have assured the Iraqi federal government that they would not participate in bindings for new investments in the region’ s oil and gas sector.
The Khor Mor gas field in the southwest of Sulaimaniyah province, which is being developed by the UAE's Dana Gas company and produces natural gas for almost 80 percent of the Kurdistan region's power plants, has been hit by several katyusha rockets in late June.