Kurdistan region obligated to hand over oil output to federal government
An oil field in the Kurdistan region. Photo: Kurdistan 24
Baghdad (IraqiNews.com) – The Iraqi government announced on Monday it is obligating the Kurdistan Regional Government (KRG) to hand over all oil production, according to a statement issued by Federal Board of Supreme Audit (FBSA).
The statement of the FBSA, which is the highest financial control body attached to the Iraqi Council of Representatives, mentioned that its Industrial Activity Audit Department took a set of measures to enforce the Federal Supreme Court’s ruling, which obliges the KRG to hand over all oil production from oil fields in the region.
The measures also aim to make sure oil contracts concluded by the KRG are no longer valid.
The court ruling also obliges the KRG to enable the Federal Ministry of Oil to review all oil contracts concluded with the KRG regarding the export and sale of oil and gas.
This step aims to check and determine the financial rights owed by the KRG.
The Federal Supreme Court of Iraq ruled last February that the oil and gas law in the Kurdistan region is unconstitutional.
The ruling obliged Kurdistan to allow the Ministry of Oil and the FBSA to monitor oil and gas sales in the region.
The decision cancels the local law in Kurdistan enacted in 2007 and forces Kurdistan government to deliver its oil production to the federal government.
Oil revenues have always been a complicated issue in the relations between Baghdad and Erbil for years.
In May, the Iraqi Ministry of Oil called on oil and gas companies operating in Kurdistan region to sign new contracts with the State Organization for Marketing of Oil (SOMO) instead of the ones signed with the government of Kurdistan.
According to Reuters, the Iraqi Ministry of Oil appointed a law firm called Cleary Gottlieb Steen & Hamilton LLP, to communicate with oil and gas companies operating in Kurdistan region to begin discussions to have the companies’ operations complied with the applicable Iraqi laws.