KRG denounces the contracts as illegal
Baghdad to sign oil contracts KRG describes as "illegal and inconsistent with the country's permanent constitution."
As an attempt to boost the oil and gas production in the country, the Iraqi government has collected tenders from many foreign oil companies. The Iraqi Oil Ministry has announced that it will declare the name of 29 international oil companies that will be granted contracts to invest in the country's oil and gas resources.
The announcement, according to a report recently published in the French newspaper "Le Figaro," is set to be made on June 30 this year. The paper states that the French Total Corporation and the Russian Le Coil Oil Company will probably beiin the list to explore, drill and produce Iraq's oil and gas.
Iraqi Prime Minister Nuri al-Maliki has said that Iraq is trying to open its doors toward foreign direct investment through the international oil companies, which would increase the oil production volume in Iraq, the main source of revenue for the country and its government's budget.
Iraq is currently producing 2.4 million barrels of oil per day. However, according to the latest contract with a foreign company, this rate is expected to increase by 1.5 million barrels per day. And according to the Oil Ministry's plans, in the coming few years the production level is set to reach almost 6 million barrels every day.
Baghdad's Oil Ministry, and in particular Minister Hussein al-Shahristani, were extremely unhappy about the oil contracts that the KRG independently signed with more than 30 foreign oil companies to invest in the region's oil and gas fields and described them as illegal. Shahristani had even threatened to blacklist the companies having contracts with KRG and not allow them to export their oil production. Despite all of this, KRG officially began to export its oil to the Turkish Ceyhan port on June 1 of this year.
Contradictorily, the KRG is now describing the oil contracts to be signed by Baghdad at the end of the month as illegal and inconsistent with the country's permanent constitution.
In a statement published by the KRG regarding those contracts, it is stated that the KRG has taken important steps in boosting the country's oil production by signing contracts and focusing on exploring and investing in new oil resources rather than working on already producing wells, which is in parallel with the most rational behaviors of the local and international markets and thus in conformity with the constitution. However, the statement expresses KRG's concern that the contracts the central government is going to sign this month lack these characteristics.
The statement also states that despite the question marks on Minister al-Shahristani, he announced last week that he would give license to oil companies to work on eight oil fields in Zubeir, Rumela, and southern Kirkuk, which the KRG thinks is unconstitutional and against the best interests of Iraq's economy.
Jaber Khalifa, a member of the Oil and Gas Committee in the Iraqi Council of Representatives, said recently that those contracts are illegal.
"According to Article 3 of law No. 97 of the year 1967, at the time of signing contracts with foreign companies, there should exist a law to regulate them," said MP Khalifa. "And therefore, the contracts the Oil Ministry is trying to sign with foreign oil companies at the end of this month are not legal. "
The Oil and Gas Committee of Parliament has already submitted some documents that prove corruption in the Oil Ministry.
By Aiyob Mawloodi
© The Kurdish Globe 2009
