Baghdad and Erbil are close to resolving the “oil law”

Baghdad and Erbil are close to resolving the “oil law”

1-3-2023

Baghdad and Erbil are close to reaching a political agreement to legislate the oil and gas law after continuous delays since 2005, and after the adoption of the law is a step in the political understandings between the federal government and the Kurdistan Regional Government of Iraq, as the Kurdistan Democratic Party announced an agreement to legislate the oil and gas law, indicating that the law It will solve one of the most prominent outstanding problems between Baghdad and Erbil.

Observers believe that the law will be a radical solution to the dispute over oil wealth between Baghdad and Erbil, and even regulate all energy files throughout Iraq.

The imperative of dialogue

“Both Kurdish parties have their own interests, and the dispute between them is a very natural issue, provided that the differences do not affect the interests of the Kurdistan region,” Majid Shankali, the party’s representative, said in a press statement.
He added, “The best way is to sit down, dialogue, reach a formula of understanding between the two parties, and head to Baghdad unified in resolving contentious points, especially the region’s share of the budget,” noting that “everyone agrees on the oil and gas law, and it will be legislated during the coming period.”

He stated that “this law will solve one of the most important outstanding problems between Baghdad and Erbil, which is the oil revenues,” explaining that “the two Kurdish parties are in agreement on the mechanism of passing the budget.”

Shankali pointed out that “there is a tendency to amend the cabinet of the Kurdistan Regional Government,” pointing out that “the names of the cabinet will be replaced after the understanding of the two Kurdish parties, the Patriotic Union and the Kurdistan Democratic Party.”

In addition, the representative of the “Fateh Alliance,” Rafik al-Salhi, said in a press statement that “the agreement concluded within the State Administration Coalition provides for the legislation of many controversial laws, the most important of which is the legislation of the oil and gas law, which was delayed for more than one parliamentary session, and will see the light due to its importance to the country and its economic situation.” As the legislation of this law will solve all the problems between Baghdad and Erbil over the oil file,” stressing that “the next legislative term will witness the presentation of the law for the first reading, to be approved during the current parliamentary session.”

political rivalry

In turn, the political researcher, Saleh Lafta, considered that the oil law has been awaiting discussion since 2005, stressing Iraq’s need for a law that guarantees the fair distribution of wealth and reduces differences between the center, the region, and the producing provinces, especially in the international situation that witnessed a rise in oil prices globally, and therefore Iraq needs additional imports. behind his approval.

He continued, “Even the Federal Court’s ruling on the unconstitutionality of the oil and gas law for the Kurdistan region and the violation of contracts concluded by the regional government with some international oil companies to invest in the fields in northern Iraq did not bring the views between the center and the region closer, as the main differences between Baghdad and the Kurdistan region are still not Decided despite the many calls through the United Nations and the United States to seek to reduce and resolve the oil disputes.

The researcher adds, “The drafting of the provisions of the oil and gas law is not difficult, but the intense political rivalry hinders the agreement.” Resolve the points that delay the adoption of the law and the submission of concessions by each party for the interest of Iraq.

He points out that “the natural resources of oil and gas belong to all Iraqis, and any exploitation, contract or agreement must be subject to the laws of the federal government in every inch of Iraq, and the federal government is responsible for managing natural resources, and it has the legal and constitutional right to conclude contracts.” Oil with any party, and placing the imports within the treasury of the federal state, otherwise those individual measures taken by the Kurdistan region encouraged other regions to claim to invest their own wealth in isolation from the center, and as it is known, not all provinces of Iraq are rich in oil and gas.

Radical solution

On the other hand, international economics professor Nawar al-Saadi reveals that “the oil and gas law is one of the most prominent laws that would resolve the crisis between Baghdad and Erbil, especially after the recent moves that preceded and followed the formation of the government of Muhammad Shia al-Sudani and the exchange of visits between the two sides.

He added, “In light of tangible political openness, and cooperation to resolve the outstanding issues between Baghdad and Erbil, there were joint understandings that put an end to a long period of disagreements, and the Iraqi arena has recently witnessed political movements between the region and the federal government in order to resolve the file of the oil and gas law, which is one of the most prominent laws.” Which would contribute to solving many problems related to the energy sector between Erbil and Baghdad.”

He explained, “The oil and gas law in Iraq, which has been awaiting legislation in Parliament since 2005, stipulates that the responsibility for managing the country’s oil fields must be entrusted to a national oil company, and it is supervised by a federal council specialized in this matter.”

However, since 2003, Baghdad and Erbil, the capital of the Kurdistan region of Iraq, have disagreed on the issue of managing the region’s oil fields, as Baghdad says that the region does not authorize the real oil export sums, and does not hand those sums over to it, while Kurdistan says that exports from the oil fields in its territory must be subject to To manage them, whether in terms of granting licenses for new explorations, managing existing fields, controlling production and exporting to destinations you choose, or contracting for purchase and development, according to Al-Saadi.

He stated that according to the Oil and Gas Committee in the Iraqi parliament, there are some proposals, including the establishment of an oil company in the Kurdistan region that is directly linked to the Federal Ministry of Oil in all its extractive and production operations. The proposals also include the establishment of another company concerned with gas investment, and a third for the investment of government refineries.

Al-Saadi believes that “the law will be a radical solution to the dispute over oil wealth between Baghdad and Erbil, and even regulate all energy files throughout Iraq, but the Oil and Gas Committee must work with the Legal Committee, in addition to the Supreme Committee formed between the central and regional governments and the (SOMO) company on the Completing the appropriate formula to put solutions to all controversial points in the file.

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