Page 4 - DMEA Week 14 2022

DMEA COMMENTARY DMEA

KRG comes under political

and missile attack

Political and missile attacks have continued in Iraqi Kurdistan
as Erbil and its oil sector come under increased pressure.

MIDDLE EAST BAGHDAD continues to up the ante on the barrels per day (bpd), just over 10% of the full
semi-autonomous Kurdistan Regional Govern- Iraqi total.
ment (KRG) as it seeks to assume control over This week, the MoO announced it had held a
WHAT: the region’s oil sector while missiles keep falling workshop “to discuss the dossier” of the KRG’s
The Iraqi government is around the provincial capital. oil and gas sector, which was attended by “inter-
seeking to bring Kurdish Federal authorities have long sought to reign national and local experts” and a team from the
oil and gas activities in independent Kurdish oil and gas ambitions, Federal Board of Supreme Audit, with KRG con-
under its own control while Erbil’s relations with Turkey and Israel tracts and cash flows discussed and reviewed.
while Iran is looking to appear to be giving Iran cause for concern. In February, Iraq’s Federal Supreme Court
prevent Erbil from having declared that laws regulating the KRG’s oil and
closer relations with Political moves gas industry were unconstitutional and said the
Israel. The Iraqi Ministry of Oil (MoO) has told region’s contracts should be voided.
semi-autonomous authorities in the northern In the ruling the court said that the KRG
WHY: Kurdistan Region it intends to set up a new state should deliver the “entire production of oilfields
The KRG currently exports oil firm to manage the Kurdish energy sector. In in Kurdistan” to the state oil marketer Somo.
its oil independently, a letter that was leaked to the press, the MoO told It added that all of the KRG’s contracts with
but Iraq’s Ministry of Oil the KRG it must transfer its oil and gas activities international oil companies (IOCs) and foreign
wants to assume control to the new company, which would be established governments covering exploration, production,
over it through a new between Baghdad and Erbil. exports and sales were invalid and that details
national oil company The ministry suggested that the new firm should be provided to the MoO in Baghdad for
should be called Kurdistan Oil Co. (KOC) and auditing.
WHAT NEXT: inferred it would be a subsidiary of the recently
While Kurdish authorities reconstituted Iraqi National Oil Co. (INOC). Exports
will continue to play a The letter was signed by Oil Minister Ihsan Erbil currently exports around 340,000 bpd of
delicate balancing act, Abdul Jabbar, who gave the KRG 15 days (from crude independently from Baghdad using a
it is likely that much will March 24) to provide the ministry with copies of pipeline which links to the Turkish section of the
depend on the formation all oil and gas contracts it has signed with foreign Kirkuk-Ceyhan pipeline via metering stations at
of a new government in companies over the last 18 years. the border town of Fishkhabour.
Baghdad. As in Federal Iraq, international oil compa- Independent oil sales have been a major
nies (IOCs) are leant on heavily by the KRG for issue for relations between Baghdad and Erbil
the development of its oil and gas resources, with and have proved thorny enough an issue to
Kurdistan’s oil production running at 450,000 prevent billions of dollars in budget share being

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