Issuing a ruling on the years-long dispute over oil revenue allocation in Iraq, the country’s federal court said laws in the federal Kurdistan region regulating the oil and natural gas industry were unconstitutional, Yeni Ozgur Politika reported.
The court said that the Kurdistan Regional Government (KRG) should hand over control of oil resources to Baghdad.
The federal court ruling also annulled all agreements between the KRG and international oil companies and said the Iraqi government should inspect past agreements.
Companies with contracts with the KRG include Chevron, Dana Gas, DNO, Gazpromneft, General Energy and Gulf Keystone.
The regional government had passed a law in 2007 for the development of oil and gas resources independently of the central Iraqi government.
The crude oil extracted in the region is exported via a pipeline that runs from Kirkuk, under Iraqi control, to Ceyhan port in Turkey’s southern Adana province.
According to industry research company Refinitiv Eikon, KDP exported an average of 10 million barrels per month between October and December last year. The majority of oil exports went to Mediterranean countries, including Greece, Croatia, Italy and Spain.
Masoud Barzani, the Kurdistan Democratic Party (KDP) leader and former KRG President, said the ruling itself was unconstitutional and “politically motivated”.
“We are announcing to all that the Kurdistan Region will defend its constitutional rights with all its might,” Masoud Barzani said while expressing hope for an agreement on how Baghdad and Erbil could share oil and gas revenue.
KRG’s current president Nechirvan Barzani called for unity to protect the gains the region had achieved.
Nechirvan Barzani had signed an agreement with Turkey in 2014, granting the country rights for 50 years. The deal led to friction with the central government, which in turn reduced the region’s share of the central budget by 17 per cent.
The Iraqi government at the time also said oil revenue in the region was higher than the budget and that the difference was unaccounted for.
Baghdad has struggled to finalise a 25-year deal with French gas company Total Energies, which was signed in Sept. 2021 following French President Emmanuel Macron’s visit.
The deal needs to be approved by the incoming Iraqi cabinet, including the oil minister.
Last week, the court announced its rejection of KDP’s candidate Hoshyar Zebari’s bid for president, according to the Iraqi News Agency (INA).
While it did not provide details, the federal court found the nomination of Zebari, former finance and foreign minister for Iraq, was not in line with legal requirements that presidential candidates be of “good reputation and integrity”.
The court had suspended Zebari’s candidacy on Feb. 6 at the request of Iraqi lawmakers based on accusations of corruption.
The vote for Iraq’s new president was delayed due to a boycott by the KDP and several other groups.
