SULAIMANI (ESTA) — The Iraqi minister of finance said on Monday the Kurdistan Region’s oil exporting is “illegal” after the decision made by the Iraqi Federal Supreme Court.
“There must be no share for the Kurdistan Region in next the year of the Iraqi budget unless the Region abides by the Federal Supreme Court’s decision,” Iraqi minister of finance Ali Abdul Amir Allawi said in a statement to the Iraqi News Agency (INA).
“The decision of the Federal Court on the region’s oil industry would compel Iraq’s Ministry of Finance to take into consideration the consequences,” he said.
“The ministry would not send the 12 percent of budget share and other financial allocations to the region” unless the Kurdistan Region handed over the region’s oil exports to the central government, and abided by the Federal Court’s decision.
The region’s oil exports must be done only through Iraq’s State Organization for Marketing Oil (SOMO), otherwise, the ministry is compelled to cut the region’s share in the budget, the minister added.
The Federal Court’s decision challenges the contracts that the region has made with international oil firms.
Kurdistan’s massive untapped oil reserves, lucrative production-sharing contracts, and safe environment have prompted international oil companies over recent years to commit to investing billions of dollars there.
But in February, Iraq’s federal court deemed the oil and gas law regulating the oil industry in Kurdistan unconstitutional and demanded that the KRG hand over their crude supplies.
Iraq’s federal court’s ruling gives the oil ministry in Baghdad the authority to manage oil and gas fields in Kurdistan.
Meanwhile, the Kurdistan Region government has repeatedly refused to abide by the Federal court’s decision to give up on its oil industry to the (SOMO) company.
Recently on Saturday, the Kurdistan Region’s Judicial Council rejected a ruling by Iraq’s Federal Supreme Court that Kurdish authorities should hand over their crude supplies saying, The actions of the KRG concerning oil and gas operations are by the Iraqi constitution of 2005,”.
