Iraqi president calls on Baghdad and Erbil to resolve oil dispute

Country's top court ruled against Kurdish petroleum rights on Tuesday amid delayed government-formation process

The Dana Gas facility in the Kurdish region of Iraq. A 2007 oil and gas law governing production, revenue and exports in the Kurdish region was ruled unconstitutional by Iraq's Federal Supreme Court. ReutersShow less

Iraq’s President Barham Salih on Thursday urged Baghdad and Kurdistan’s semi-autonomous government in Erbil to resolve their oil and gas dispute.

Iraq's Federal Supreme Court on Tuesday ruled that an oil and gas law from 2007, governing production, revenue and exports in the Kurdish region, was unconstitutional. The ruling invalidated Kurdistan Regional Government oil contracts with oil companies, foreign parties and states.

The court decision stated that the Kurdish government in Erbil must hand over all crude from the KRG and neighbouring areas to the federal government, represented by the Ministry of Oil in Baghdad.

“A serious and immediate dialogue must commence between the two sides in order to find a realistic mechanism and a practical solution to the content of the court’s ruling,” said a statement by Mr Salih’s office.

Mr Salih said both sides must “act responsibly in salvaging their ties” and added that the people of the Kurdish region were facing many issues such as delays in employee salaries and pensions due to the dispute.

The court ruling came amid a protracted government-formation process that has been delayed by political wrangling.

It also stated that the Ministry of Oil must be allowed to audit all agreements concluded by the KRG with oil and gas companies.

The KRG rejected the court's decision and said the ruling was not only “unconstitutional” but also “unjust”.

KRG President Nechirvan Barzani said that the court’s decision could further complicate differences between Erbil and Baghdad.

Masoud Barzani, leader of the ruling Kurdistan Democratic Party and a former KRG president who played a role in drafting the Iraqi constitution, called the decision “political”.

“The aim of [the court's decision] is to antagonise the Kurdistan Region and the federal system in Iraq,” he said.

“We hope that the governments of Iraq and the Kurdistan region will be able to overcome the obstacles and agree on the oil and gas file.”

In Baghdad, Prime Minister Mustafa Al Kadhimi urged the Ministry of Oil to co-ordinate with the KRG on the energy issue.

“The council has decided to mandate the oil ministry to communicate and co-ordinate with the KRG, concerned companies and countries to prepare the mechanisms to manage this [oil] file in accordance with the provisions of the constitution,” said a statement by Mr Al Kadhimi’s office.

Dozens of oil and gas contracts signed by the KRG since 2005 will be called into question following the ruling, which followed the signing of a contract between the region’s Ministry of Natural Resources and Norwegian company DNO, allowing the company to drill for oil near Zahko, close to the Turkish border.