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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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Established in 2006 as a Community of Reality

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    An American center that evaluates the results and repercussions of international arbitration over Ku

    Rocky
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    • Post n°1

    An American center that evaluates the results and repercussions of international arbitration over Ku Empty An American center that evaluates the results and repercussions of international arbitration over Ku

    Post by Rocky Thu 30 Mar 2023, 9:43 am

    [size=30]An American center that evaluates the results and repercussions of international arbitration over Kurdistan oil
    [ltr]2023.03.30 - 15:41[/ltr]
    [/size]
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    Baghdad - Nas  
    The American Center for Strategic and Security Studies published on its website its assessment regarding the results of international arbitration against the semi-autonomous Iraqi Kurdistan Regional Government (KRG) regarding its independent oil export.  
      
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    The center's report stated in its evaluation, which was followed up and translated by "NAS", (March 30, 2023), that the decision will harm the oil industry in the Kurdistan Regional Government and its investors, and will give Baghdad enough influence to make more changes to the regulatory environment for oil and gas in the region.  
      
    The following are the highlights of the analytical evaluation:  
      
    On March 23, the International Court of Arbitration of the International Chamber of Commerce ruled that the KRG cannot export oil through a pipeline system that runs through Turkey to the Mediterranean port of Ceyhan without Baghdad's approval.  
      
    At the request of the Turkish government in the wake of the ruling, the Kurdistan Pipeline Company stopped the flow of oil through the pipeline, forcing the largest oil producers in Iraqi Kurdistan - DNO, Genel Energy and Gulf Keystone Petroleum - to divert the flows to storage tanks.  
      
    On March 26, Iraqi officials and the Kurdistan Regional Government began discussing the resumption of oil exports in the region (450,000 barrels per day), but on March 27, Bloomberg reported that the talks collapsed without agreement. KRG oil producers are expected to deplete storage facilities within days, after which they will have to shut down oil production, DNO announced on March 29. DNO's assets produced nearly a quarter of the KRG's oil in 2022.  
      
    The ruling reinforces Baghdad's efforts to control more of the oil and gas sector in the Kurdistan Regional Government, which will force the Kurdistan Regional Government to reach a settlement that is likely to be in favor of Iraq.  
      
    The level of autonomy that the KRG enjoys over its own oil industry has been in legal uncertainty for many years due to disagreements over the interpretation of several articles in Iraq's 2005 constitution. In 2007, the KRG exploited this uncertainty to pass the Oil and Gas Law, Who created the production sharing contracts that KRG oil producers use today.  
      
    Baghdad was able to undermine most of these contracts in 2007 because it controlled all the major oil pipeline infrastructure that the KRG could use to export any oil produced, which means that the federal government still has significant influence over the region. But in 2013, the new KRG-Turkey pipeline was completed directly, bypassing Iraq's infrastructure and enabling the KRG to export oil independently.  
      
    Baghdad, in response to the region, launched an arbitration case in 2014, saying that the Kurdistan Regional Government could not export oil without Baghdad’s approval. In February 2022, the Iraqi Federal Supreme Court ruled the 2007 KRG law unconstitutional, leading Baghdad to threaten legal action against oil companies still operating in the oil sector in the region.  
      
    The March 23 ruling adds the weight of international law to the Supreme Court's domestic ruling, which would give Baghdad enough legal weight to significantly disrupt the KRG's oil sector. At this point, the KRG would have to reach a settlement with Baghdad that would likely involve significant concessions, including the rights to the oil fields themselves.  
      
    Baghdad's increasing control over the KRG's oil sector after the March 23 ruling will fuel the government's efforts to curb any hints of separatism or federalism that threaten (and continue to threaten) Iraqi sovereignty in all of its geographic areas.  
      
    The majority of Iraq's oil comes from southern Iraq, where some local leaders in provinces including Basra and Dhi Qar have alluded over the years to the federal separation of Iraqi provinces from the central government, something Baghdad wants to prevent.  
      
    Baghdad's greater economic influence in the semi-autonomous region may undermine the influence of the main Kurdish political party in the KRG ahead of the upcoming elections in the region. Without the ability to independently market oil and generate oil revenue from Kurdish fields thanks to court rulings in February 2022 and March 2023, the KRG economy (and the politicians who run it) have no choice but to remain heavily dependent on federal government budgetary appropriations to foot the sector's salary bill. Large year in the region and the salaries of the security forces. This apparent weakness could hurt the popularity of the ruling Kurdistan Democratic Party, which negotiated the 2013 construction and export pipeline with Turkey, as well as a tug-of-war with Baghdad over budget funds. So.  
      
    Later elections in 2023 could see the KDP lose some ground to its main rival, the Patriotic Union of Kurdistan.  
      
    Ultimately, the Iraqi federal government may have the ability to dictate new investment terms for international oil and gas companies (IOCs) operating in the Kurdistan region. Successive Iraqi governments have long asserted that PSCs with the KRG, which are largely seen as internationally competitive, are illegal because under Iraqi law, PSCs are prohibited, and the federal government has instead offered its oil reserves through More restrictive technical service contracts.  
      
    With the growing influence of Baghdad in the oil sector of the Kurdistan Region, it is likely that the federal government will try to divert or expel foreign oil companies operating in the sector according to the KRG model. While this would be disabling for companies currently operating in Kurdistan, as they would have to accept less competitive terms or withdraw from the region.  
      
    Baghdad's greater control over the KRG's oil and gas sector will increase the confidence of international oil companies in the legal framework for oil investment in the region, which could lead to more investment from new companies. Baghdad's greater control over Kurdistan's oil and gas reserves would also make it easier for the federal government to develop other oil and gas reserves in northern Iraq.  
      
    Before Baghdad can access these potential benefits, it will need to negotiate the fine print of the settlement with the KRG, such as changes to revenue-sharing processes. With this, Baghdad and the KRG could reach an interim short-term agreement in the coming weeks to resume production.  
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