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Next Iraqi Oil and Gas Licencing round
could legitimise Kurdistan Govt oil contracts
19.5.2011
By Shwan Zulal - ekurd.net |
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May
19, 2011
SULAIMANIYAH,
Kurdistan region 'Iraq', — The oil and gas laws in
Iraq are set to be delayed once again and there
seems to be no political will to resolve the issues
holding back some companies investing in Iraqi
energy sector. A dispute is brewing and this time is
between the Iraqi parliament and Al-Maliki's (Nuri
Al-Maliki, Iraqi Prime Minister) Government. Oil and
Energy Parliamentary Committee headed by Adnan Al-Janabi
appears to be trying to delay January round of Gas
and Oil licence auction.
The parliamentary committee
have threatened to take the issue to the lawmakers
and try to block the government's attempt to go
ahead with auctioning the licences before the Iraqi
Petroleum law is in place.
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Oil in Iraqi Kurdistan. |
Al-Janabi, told Reuters
that, "he had asked the Oil Ministry to postpone the
auction but it had refused, and any contracts that
resulted would be illegal."
He added that his
committee would ask parliament to forbid "the
carrying out of new bid rounds or the signing of any
new contracts until the necessary petroleum
legislation is passed". Iraqi oil ministry has
issued a brief statement in response saying that the
ministry is holding the auction in compliance with
Iraqi laws. However, the committee has been
threatening to ask parliament to pass a law
preventing the government from signing any new
contracts.
Referring to Kurdistan oil contracts, Al-Janabi, has
been quoted by the news agency that the contracts
needs to be "brought into line". Kurdistan Region
has been in the centre of this political squabbling.
There are nearly 40 companies operating in the
region and their contracts with KRG (Kurdish
Regional Government) has been and still in question.
Although many international legal experts have
rendered the contract constitutional and there has
been political agreement. The position remains
unclear and the latest remarks by Al-Janabi, does
not make it any clearer.
The latest dispute between the Al-Janabi and Al-Maliki's
government highlights the lack of political
direction in Iraq. Nevertheless, if the government
wins the argument -which is very likely as previous
attempt to stop the auctions in Court has failed-
and goes ahead with granting the new licenses in
January without the oil and gas legislation, it will
certainly give legitimacy to the KRG oil contract.
The argument against the validity of Kurdish oil
contract has always been whether the contracts are
constitutional. The constitution stipulates, oil and
gas legislations must be passed to regulate the
industry and grant licenses must be carried out
accordingly. It is likely that the new round of
licenses will go ahead as oil ministry planed and
the Energy Committee in charge of the new
legislation will oppose it. As Al-Janabi said,www.ekurd.netthe
contracts will be "illegal" hence; the contracts are
invalid and unconstitutional according to the
committee. This will automatically set precedent and
put the new and old contracts granted by the Iraqi
government in par with contracts granted by KRG.
The process of granting KRG licences has been far
from transparent, but it has brought expertise and
money for a much-needed infrastructure in the
region. Only yesterday, the Kurdish opposition were
asking for more transparency from the Kurdish
government when dealing with oil companies and their
contracts. Granting licences to oil exploration
companies and attracting investors have been
successful in Kurdistan Region. Despite disagreement
over the validity of the contracts in Baghdad,
investors have poured money into the region in
excess of $10Billion.
Investors in Kurdistan are somewhat reassured by the
recent payment of outstanding amounts for exporting
oil from Kurdistan, which was long overdue.
Furthermore, Al-Maliki's attempt to grant licences
without the oil and gas law being passed will
politically make it difficult to render Kurdish
contracts granted under the same conditions invalid
while giving legitimacy to other contracts granted
by central Iraqi government.
AL Janabi also told Reuters "If the Oil Ministry
proceeds with its plans, it will not be acting
legally, and any signing parties will do so at their
peril". The uncertainty has spooked some investors
and cast doubt on the future supply projection of
the Iraqi oil production. The Iraqi government oil
production targets by 2017 was 12 million barrel per
day, but many experts and even ministers doubt this
could be achieved, while the political turmoil
continues.
Iraqis are suffering and have neither basic services
nor security. Meanwhile, the country has been
rundown by rampant corruption. Division and lack of
trust among politicians has lead to incongruity and
disagreement on how to sell the only commodity Iraq
depend on and its main source of income.
Shwan Zulal
is a Kurdish Blogger, a regular contributing writer
for ekurd.net, interested in political and legal
Reform in Kurdistan, KRG, Iraq and current Kurdish
affairs, including oil exploration companies and
relevant legislations. You may visit Zulal's website
at http://kurdishviews.blogspot.com/
Copyright © 2011 ekurd.net
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