Economy

KRG rejects Baghdad's proposal for an Iraq-controlled Kurdistan Region Oil Company

The KRG instead proposed that it could establish its own oil company that it would administer, Khasro said, without elaborating on what the Iraqi side thought of the proposal.

Kurdistan 24 2022/04/15 12:24

Meeting between the KRG negotiating delegation and representatives from the Iraqi Oil Ministry in Baghdad, Apr. 11, 2022 (Photo: Government of Iraq)

Kurdistan Erbil Baghdad Iraq Krg Oil and Gas law KROC KOMO SOMO

ERBIL (Kurdistan 24) – The Kurdistan Regional Government (KRG) has refused to accept Baghdad's proposal to establish an Iraqi-run oil company in Erbil to manage the Kurdistan Region's energy dossier, a top government official told Kurdistan 24.

Following the Iraqi Federal Supreme Court's (FSC) ruling that the Kurdistan Region's oil and gas law is unconstitutional, the KRG sent delegations to Baghdad to negotiate on the outstanding issue. During those negotiations, the Iraqi Ministry of Oil proposed establishing a company called the Kurdistan Region Oil Company (KROC) in Erbil to be managed by the central government to resolve the issue. The company would be in charge of the Kurdistan Region's energy dossier.

"Baghdad's proposal and request to establish an oil company owned by it in the Region was refused," Abdul Hakeem Khasro, the head of the Kurdistan Region's Department of Coordination and Follow-up, told Kurdistan 24 on Thursday.

The KRG instead proposed that it could establish its own oil company that it would administer, Khasro said, without elaborating on what the Iraqi side thought of the proposal.

Khasro also added that the KRG proposed establishing KOMO, presumably the Kurdistan Organization for Marketing of Oil, the equivalent of Iraq's State Organization for Marketing of Oil, known by its acronym SOMO.

The court's ruling noted that KRG's Oil and Gas Law issued in 2007, under which the Region has managed its oil affairs with international and local companies, is "unconstitutional", a claim which the Kurdish authorities strongly refute.

In the absence of a new oil and gas law, the Iraqi government still uses Law No. 101 from 1976. The KRG says the law is one of the leftover "centralized laws" from the Baathist era and is incompatible with the spirit of federalism that was supposed to prevail in post-2003 Iraq.

Khasro said that the KRG will continue its talks with the Iraqi side until reaching an agreement based on the Iraqi constitution that protects the Kurdistan Region's rights and entitlements.