Autos & TransportationCommodities

Shiite Lawmakers Push for Kurdistan’s Oil Control Shift

Shiite Lawmakers Call for Federal Control of Kurdistan Oil and Gas

A faction of Shiite lawmakers in Iraq has put forth a demand for the transfer of all oil and gas resources from the Kurdistan Region to the federal government. This development comes ahead of an important parliament session scheduled for tomorrow, during which lawmakers are set to vote on amendments to the budget law specifically addressing the oil situation in Kurdistan.

The agenda for the meeting will include four key items, with the vote regarding the budget law—central to the ongoing negotiations surrounding Kurdistan’s oil—taking precedence.

Jamal Kochar, a member of the Iraqi parliament’s finance committee, indicated that there are three proposed texts for amending Article 12 of the budget law. However, he noted that the Kurdistan Regional Government (KRG) is unlikely to agree to the text favored by the Shiite lawmakers.

Kochar explained, “The first proposal, prepared by the federal government, includes two primary components: the first paragraph estimates costs for oil extraction and transportation at $16 per barrel until a final price is mutually agreed upon by both the KRG and the federal government.”

He further elaborated, “The second paragraph stipulates that, should the two parties fail to reach an agreement, the Iraqi Oil Ministry would engage an international entity to ascertain the extraction and transportation costs.”

“A subsequent text was created by the finance committee and a newly formed coalition of Shiite lawmakers, which the government outright rejected, subsequently sending back a revised text of its own,” Kochar stated. He emphasized that the government has expressed support for the initial text, but cautioned that any amendments must align with the government’s requirements.

The newly prepared text asserts that all domestic oil, oil exported abroad, and gas from the Kurdistan Region will fall under the jurisdiction of the federal government.

In a recent meeting between Iraqi Prime Minister Mohammed Shia Sudani, the parliamentary speaker, and faction leaders, consensus emerged to proceed with a vote on the initial proposal, which they believe will resolve ongoing disputes. Kochar warned, however, that if alternative proposals are introduced for a vote, it could jeopardize the current solution and exacerbate the existing issues.

Kochar noted, “There is no guarantee that all parliament members will support this amendment, as there is a pattern in parliament where consensus is reached but ultimately disregarded, posing a threat to the government’s proposed text.” He highlighted that the proposed amendments encompass both oil exports and domestic consumption, as well as gas issues arising from the Kurdistan Region.

He added, “The discussions regarding gas are ongoing amidst the complexities of the oil and gas law. This issue cannot be conclusively addressed through budget law amendments alone; it necessitates a more comprehensive legislative approach.”

“Time is of the essence, and modifications to the budget must occur swiftly to ensure compliance from the Kurdistan Region, which has shown reluctance to accept the Shiite lawmakers’ proposed text,” Kochar asserted. He warned that failure to approve this amendment could push negotiations into the Ramadan and Hajj holidays, transforming the budget amendment into an electoral battleground.

The amendment focuses specifically on Article 12 concerning the production, transport, and delivery of oil in the Kurdistan Region, establishing $16 as the production and transportation cost per barrel while stipulating that the Kurdistan Region is to deliver 400,000 barrels of oil each day.

“Until the term ‘consensus’ is removed from the law, the budget and salary issues facing the Kurdistan Region will remain unresolved,” Kochar concluded.

Shares: