Kurdistan’s massive untapped oil reserves, lucrative production-sharing contracts and safe environment have prompted international oil companies over recent years to commit to investing billions of dollars there.
But in February, Iraq’s federal court deemed the oil and gas law regulating the oil industry in Kurdistan unconstitutional and demanded that the KRG hand over their crude supplies.
Iraq’s federal court’s ruling gives the oil ministry in Baghdad the authority to manage oil and gas fields in Kurdistan.
Iraqi oil minister Ihsan Abdul Jabbar said on Saturday that his ministry would proceed with implementing the court’s ruling after officials from Baghdad and Erbil failed to reach an agreement over oil output and exports in the Kurdistan Region even after 75 days of talks.
“Such a ruling will lead to protecting energy security in the federal state,” he said.
“It is illogical to have two polices for oil and gas output in one country. This situation cannot continue.”
Bewar Khinsi, KRG prime minister’s adviser for energy affairs, said in an interview with VOA that Erbil would not abide by the ruling as it is “contrary to the constitution”.
“Baghdad doesn’t come forward to solve the problems through talks, dialogue and negotiations,” he was quoted as saying.
“Now, if an article of the Kurdistan Region’s oil and gas law is inappropriate, it can be negotiated, but to say it should be annulled, it is unconstitutional,” he added.
He further said the comments by the Iraqi oil ministry was to pressure the KRG and was related to the current political situation in Iraq.
“We won’t be affected by such pressures, but we are ready to sit down with them and solve the issues through negotiations in several meetings,” he noted.
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