Kurdish MP Ali Hussein Balo defends Kurds, who some accuse of hindering passage of the law.

Abdul-Hadi al-Hassani, the Deputy Chief of the Oil and Gas Committee in the Iraqi Council of Representatives announced that his country's government is cooperating with neighboring countries to prevent the Kurdistan Regional Government (KRG) from exporting its oil and gas to outside Iraq.

This claim comes at a time when tensions between Erbil and Baghdad, and particularly Iraqi Oil Minister Hussein al-Shahristani, still exist over KRG oil deals and activities. Negotiations for a solution are ongoing.

Al-Hassani, MP on the United Shiite Alliance List and Deputy Chief of the Oil and Gas Committee, also says that the KRG Oil and Gas Law passed by the regional Parliament in August 2006 includes many articles that are different and even opposite to the draft National Oil and Gas Law, which has already been approved by the Council of Ministers and awaits Parliament approval.

There have been lots of arguments and disagreements between the KRG and the central government about the national law. Kurdish representatives in Baghdad took part in drafting the law, pushed other political groups to accept it, and were very optimistic about the decision of the Ministerial Council to approve the draft law.

However, as Kurds claim, some parties changed some parts of the law on its way to Parliament, thereby reducing the powers of the regions over oil and gas revenues and adding to the central government's powers. This irritated the Kurds, who decided not to vote for this law in Parliament.

Due to these tensions between Baghdad and Erbil, the KRG passed its own Oil and Gas Law and signed a number of production-sharing contracts (PSCs) with some international oil companies to invest in the region's oil and gas resources.

This angered al-Shahristani, who described the PSCs as illegal. He went further and vowed not to cooperate with those foreign companies who signed contracts with the KRG.

As a measure to threaten those companies, al-Shahristani decided to stop working with an Austrian company and to stop selling it oil.

Among those oil and gas investment contracts is the contract between the KRG and Dana Gas and Crescent Oil for the implementation of the Gas City project. Like all other KRG contracts, this contract has been signed without the coordination of the Iraqi Oil MinistryIraqi Oil Ministry and under the supervision of Somo Company, a public-sector company affiliated with the Oil MinistryOil Ministry, which is managing Iraq's oil sales.

In the case of Crescent Oil, the Iraqi Oil MinistryIraqi Oil Ministry has also decided not to sign any contracts with the company since it is working on the Gas City in Kurdistan.

Al-Hassani said that this contract has to be signed under the supervision of the Iraqi government. He added that he doesn't expect the KRG to export oil and gas without the central government's consent.
According to what al-Hassani says, the Oil MinistryOil Ministry is currently trying to abolish all the contracts that have been signed before the approval of the national law, which is expected to be approved by the Iraqi Parliament in the near future.

Ali Hussein Balo, a Kurdish MP and a chairman on Iraqi Parliament's Oil and Gas Committee, said on September 11 that though some Iraqi officials claim the Kurds are hindering the approval of the Oil and Gas Law, the opposite is true. He also said that al-Hassani's speeches about the issue are far from reality.

"The Iraqi government and Prime Minister Nuri al-Maliki himself and Hussein al-Shahristani hamper the approval of the law," Balo told a local Kurdish news agency. "This is because since February last year all the political parties have agreed on a draft of the law, but later changes were made in the draft."

Balo also added that until now, the Oil MinistryOil Ministry hasn't been able to submit the changed draft to the Parliament's Oil and Gas Committee so as to be put into Parliament's schedule for discussion and approval.

By Aiyob Mawloodi

© The Kurdish Globe 2008

 

Community Comments (1) - Comment on this article

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by eamad j mazouri - 22-Nov-08
When it comes to oil contracts, the post Saddam Iraq is a federal democratic Iraq according to its constitution of 2005 that was voted on by more than 80% of Iraqi voters and ratified by the democratically elected Iraqi parliament. This constitution is clear on the three areas of exclusive powers of the federal government in Baghdad; the defense, monetary and foreign policies. There are also the shared powers between the federal government and the regions, however if a conflict arise in any of these areas the constitution gives the regional laws an upper hand over the federal ones. We must admit that Oil related articles are vague, while clearly stating oil revenues would be shared by the entire Iraqi population it gives the region implicitly the right over non-current fields. However, it is understood that there should be cooperation and coordination between the federal and regional governments not only on signing oil contracts, but also on other issues such as exploration rights, administration and marketing. The federal ministry of oil has signed as many or more contracts than KRG with international companies without even consulting KRG, even when these contracts are related to oil fields under the jurisdiction of KRG. If KRG contracts are illegal as he claims then the contracts his ministry signed should be illegal as well. At any rate, it is understood that in the absence of a federal hydro-carbon law they both have the right to go ahead with these contracts as long as they serve people and do not violate international standards especially if the country is in dire need for oil generated revenues to support basic services such as clean water, power, communications and decent roads as it is the case now in Iraq. Also as a consequence to that the country is in need of foreign investments specifically in oil industry when it comes to capital, technology and expertise. Nevertheless, if the differences between the two parties reach a certain level then the federal Supreme Court should be the referee not the media as Mr. Shahristani has done. [Report Abuse | Email to a Friend | Reply to this Comment]

 

 

 

 

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