Iraqi Kurds say Baghdad has no right to control oil industry

Developing natural resources is one of many unresolved issues between the Kurds and Iraq's central government

Former Kurdish president Massoud Barzani, right, and former Iraqi president Jalal Talabani at a ceremony to celebrate the start of oil exports from the autonomous Kurdish region in 2009. Since then, tShow more

The judicial authorities in Iraq’s semi-autonomous Kurdish region have defied a ruling by the country’s top court to allow Baghdad to control its oil and gas industry.

The right to develop natural resources is one of many issues outstanding between Iraq's Kurds and the Arab-dominated central government since the 2003, US-led invasion that toppled the Saddam Hussein regime.

Since then, the Kurdish authorities have signed dozens of oil and gas deals with foreign companies and countries.

However, Baghdad has maintained that those deals are illegal because it did not approve them. The Kurds argue that the constitution allows them to strike deals without going to Iraq's federal Ministry of Oil.

In February, Iraq’s Federal Supreme Court raised this bitter dispute to a new level when it issued a ruling that said the Kurdish region's law regulating its oil and gas industry was unconstitutional. The court demanded the region hand over all this industry’s activities to Baghdad.

However, the Kurdistan Judicial Council said "the actions of the Kurdistan Regional Government in relation to oil and gas operations are in accordance with the Iraqi constitution of 2005”.

“The provisions of the oil and gas law issued by the parliament of the Kurdistan region in 2007 do not violate those of the Iraqi constitution," it added.

It argues that Article 112 of the constitution mentions only those fields that were operating at that time that the constitution was written.

But the fields that started commercial production after that date did not fall under this article, it claims, indicating that all oil and gasfields currently operating in the Kurdish region started commercial production after August 2005.

Following the court's ruling, the Ministry of Oil began to take steps to carry out the decision but to no avail.

It asked the Kurdistan Regional Government to send a representative to a committee it formed to enforce the decision. It also proposed a state-owned regional oil company for the Kurdish region to replace its Ministry of Natural Resources. Baghdad would oversee this company.

The KRG refused to agree and instead called for political negotiations.

Last month, the Ministry of Oil started legal action to enforce the ruling. It first contacted those oil companies working in the Kurdish region about their contracts and to prepare lawsuits in local and international courts, a ministry official told The National.

The official, speaking anonymously, did not divulge more details.

However, the Iraq Oil Report website, cited three Kurdish-focused industry officials as saying that several oil companies received a letter summoning them to appear at the Commercial Court in Baghdad on Sunday.

"We are scratching our heads about how to respond to this latest salvo and want out of the melee if we can avoid it," one official at an oil company that received a summons told the website.

A federal oil and gas law intended to clarify articles of the constitution governing this sector was never passed by Iraq's parliament owing to a lack of consensus.

The impasse over independent Kurdish export rights has never been resolved, despite a number of short-lived deals over the years.