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October 4, 2023[You must be registered and logged in to see this link.]
Baghdad/Al-Masala Al-Hadath: Iraqis have been waiting to discuss the long-awaited oil and gas law for more than a decade.
Political differences within Parliament led to a delay in voting on it, even though it represents the main revenue component of the Iraqi budget.
Since the first session of the Iraqi Council of Representatives, in 2005, the draft oil and gas law has been stuck in drawers, as disagreements prevent its approval in its final form.
Committee member Ali Al-Mashkour said, “The reasons for the delay in approving the law in the House of Representatives are not only technical controversial points, but there are administrative points that do not exceed seven points,” pointing out that “Prime Minister Muhammad Shiaa Al-Sudani and the heads of the political blocs are continuing to negotiate to try to pass the law.” The law has the least possible differences, given that there is no law that serves everyone equally, and this is not possible as a result of the disparity in existing shares.”
The representative added, “There is a dispute over the management of the fields in the Kurdistan region and who will manage these fields, whether the federal government or the Erbil government, but as a law, it must be implemented on the various components within the country, whether in the region or in Basra, given that the latter is no different.” Regarding Kurdistan, we are all under one umbrella, which is Iraq. He noted that “the Kurdistan Regional Government is trying to continue the same old policy that was tiring it in managing its fields, which lacked a central presence.”
In late August, a committee was formed to develop a draft of the oil and gas law and present it to the government and the House of Representatives.
Iraq exports an average of 3.3 million barrels of crude oil per day, and black gold constitutes more than 90 percent of the Iraqi treasury’s resources.
One of the most important changes included in the new law is the affirmation of the federal government’s sovereignty over oil and gas throughout the country. This represents a victory for the federal government in a long dispute with the Kurdistan Regional Government, which has been demanding control of the oil and gas resources in its territory.
It is expected that the adoption of the new law will increase the stability of the oil and gas sector in Iraq and improve the efficiency of managing oil resources. It is also expected to increase oil revenues for the Iraqi government, which can be used to finance economic development and social projects.
The financial advisor to the Iraqi Prime Minister, Mazhar Muhammad Salih, said that accelerating the adoption of the federal oil and gas project law in the House of Representatives as quickly as possible will establish a stable national road map for investment and production of the country’s primary sovereign resource, which is oil and gas.
He explained that this natural resource contributes directly to Iraq's gross domestic product at a direct rate of approximately 50 percent, and leaves an indirect impact on the total economic activity of our country at a rate of no less than 85 percent.
Economist Nabil Al-Marsoumi revealed disagreements between the center and the region that may affect the draft new oil law.
Al-Marsoumi said in a blog post followed by Al-Masala, “There are several differences between the center and the region that may affect the draft new oil law.”
Disagreements over the oil and gas law focus on the powers to produce oil and gas, the method of managing joint fields, and the interpretation of Article 11 of the Constitution.
The Oil, Gas and Natural Resources Committee warns of “administrative” disputes behind the delay in approving the Oil and Gas Law.
Historically, there have been disagreements between the federal government of Iraq and the Kurdistan Region on issues related to the oil and gas industry.
These disputes include a range of complex issues related to rights, distribution, and administration, and have caused escalation of tension between the two sides.
The differences relate to the management of fields located in the Kurdistan region and who will manage these fields, whether the federal government or the Erbil government.
But the Kurdistan government wants to manage the fields itself, away from the federal government.
The region is also facing the repercussions of the decision of the International Arbitration Court and the sanctions imposed on Turkey due to exports, which may push it to submit to the will of Baghdad.
Disagreements still exist over the extent of the Kurdistan Regional Authority’s authority to extract and export oil and gas independently.
The federal government considers that it has the exclusive authority to manage and export oil and gas resources at the national and international levels.
There are also disputes over how to distribute oil and gas industry revenues between the federal government and the Kurdistan Region, and they have always been a source of tension, as the region claims its right to obtain a larger percentage of oil revenues based on their contribution to production.
Some agreements and temporary solutions have been reached over the past years, but differences still cast a shadow over the relationship between the federal government and the Kurdistan Region. While real solutions require continuous consensus and dialogue between the parties concerned.
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