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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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National Oil issues a statement on the contracts and agreements signed in the Kurdistan region

rocky
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National Oil issues a statement on the contracts and agreements signed in the Kurdistan region Empty National Oil issues a statement on the contracts and agreements signed in the Kurdistan region

Post by rocky Thu 12 May 2022, 9:23 am

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Today
, Thursday, the National Oil Company issued a statement on the contracts and agreements signed in the Kurdistan region.
The company stated, in a statement received by the Iraqi News Agency (INA), that "the competence of the federal government in managing the current fields does not negate its lack of competence in managing the fields that will be discovered in the future."
She added, "Saying otherwise will lead to illogical results, the most prominent of which is that some regions will participate with the state and other regions in the explored fields before the entry into force of the constitution on the one hand, and will be unique in managing and exploiting the new and explored fields on the other hand, in their lands, which leads to the inflation of their imports and an increase in the welfare of their residents." Compared to the regions and governorates that are not organized into a region in the country.
And the company continued, "Also, the fact that any region concludes oil contracts and agreements with international companies and countries to export the extracted oil and gas violates the provisions of the above constitution, because the federal government's jurisdiction is to formulate oil and gas development policy and manage the activity related to them and its competence in foreign trade."
She explained, "The financial terms of service contracts prepared by the Ministry of Oil, which will be approved for redevelopment, comprehensive development or exploration in all licensing rounds, are the best compared to the financial terms of production-sharing contracts, whether it is for the state or foreign companies (contractor)."
The company indicated, "In production-sharing contracts for the region's fields, the contractor is given a share of the extracted oil, in addition to the freedom to dispose of his share of the produced quantities and sell them at the place and time specified by the contractor, and this violates Article 111 of the Constitution, which clarifies that oil and gas are the property of the Iraqi people."
And she added, "In spite of this, the region authorized foreign companies to fully control the petroleum operations through the terms of the production-sharing contracts for the region, as one of these clauses included, "that the government and each contracting entity have the right and obligation to sell or dispose of their oil shares in kind," indicating, “That is, the regional government has given the contractors the right to sell their share of the oil produced and pay the government’s share.”
She stressed by saying: “Where the opposite is supposed to be true, and this means that the principle of control over production rests with foreign companies, and this is in contrast to service contracts for tours. Licenses for the Federal Ministry of Oil.”
She pointed out, “All oil produced through licensing rounds contracts is sold by the Oil Marketing Company (SOMO) at competitive prices that achieve the highest revenues for the Iraqi people.”
The statement said: "The Federal Ministry of Oil would also like to show that the financial terms of production-sharing contracts for the Kurdistan region - Iraq compared to the financial terms of service contracts have achieved very high benefits and profits for foreign companies at the expense of the government due to the absence of the principle of transparent competition and the resort to a direct bilateral agreement with companies. When referring those contracts, this is contrary to what was approved by the Federal Ministry of Oil in the oil licensing rounds.
He continued, "This caused the loss of the opportunity to obtain the best commercial terms to maximize financial revenues from selling oil produced from the region's fields, as the financial returns of the regional government constitute no more than 80% as an average after deducting production costs (the cost of producing a barrel of oil), while the returns constitute The financial statements for the first and second licensing rounds increased to more than 94.5% to 96.5%, and as shown in the attached commercial plans, and that the production costs were equivalent to 4 times the production costs in the licensing rounds of the Federal Ministry of Oil.
And between, “On the other hand, the regional government signed on itself, through production-sharing contracts, a contractual obligation to exempt contractors from taxes and allowed them to inflate their profits without imposing any kind of taxes or sharing those inflated profits, especially when oil prices rose globally, and this violates the tax law. For the year 1982 (amended) and its instructions.
He pointed out that "the region did not adhere to the quotas allocated to Iraq under the OPEC agreements, which negatively affected the quantities of oil allocated to Iraq from the central and southern fields, and therefore negatively affected the financial returns of the federal government, despite bearing its burdens by securing the salaries of its people in the region."

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