Iraq's HCL


Araji of the Parliament: Coming Soon gas oil law in the Council of Ministers and the siege on the region
Araji of the Parliament: Coming Soon gas oil law in the Council of Ministers and the siege on the region
07/02/2015 06:09
The Deputy Prime Minister and Chairman of the Ministerial Committee for Energy Bahaa al-Araji, the House of Representatives in session today hosted "The draft oil and gas law will be presented soon in the Council of Ministers", stressing that "no siege of Baghdad to the Kurdistan region, including in relation to financial budget."

House of Representatives hosted today in its meeting held under the chairmanship of Salim al-President of the Council and in the presence of 215 deputies Araji Thursday to discuss energy and electricity in the files Mohammed Darraji sworn in as minister of industry.

At the outset of the session Jubouri offered the condolences of the House of Representatives deputy Abd al-Hadi al-Hakim of the death of the late mother.

This was followed by the President of the House of Representatives a speech marking the start of the legislative year for the second Council which he asserted that Baghdad will not be held hostage to surrender and recidivism despite what went through the events throughout its history, pointing out that the House of Representatives are the hope of the people and its representatives legitimate who are expected to speak Dmirh and aspirations of working with the executive power It was born from the womb of parliament, calling for the adoption of legislation to facilitate the work of the government package.

Jubouri said that legislation will be approved or that approval interested in developing citizens, noting that the House of Representatives is determined to follow up the supervisory role to hit corrupt as the parliamentary committees continue its work for the completion of major issues, especially the corruption of at least a threat to terrorism.

He called on the President of the House of Representatives of parliamentary committees to resolve their proposals to provide the agreed legislation on them, stressing that it is time to rectify the differences in order to combat terrorism, which requires reset the internal problems and a full-time to the threat of terrorism starting from the relationship with the province and the application document the political agreement in addition to the national reconciliation project.

Then the Council hosted Bahaa al-Araji, Deputy Prime Minister based on his desire to discuss issues related to energy and electricity.

He welcomed al-Jubouri, Deputy Prime Minister pointing out that the Council is determined to hold a series of meetings to follow up the work of the executive authority.

At the outset of hosting al-Araji, he confirmed the existence of failures and cons in the electricity and energy annotate their file has been due to lack of strategy for the energy sector in an integrated manner or units within this sector as well as the rise in oil prices, which have been relied upon without expecting landing.

He said Deputy Prime Minister that the government and despite what has been disbursed from the funds are still in the initial stages, especially that the ministry was in the last phase focused on power plants that have been built based on the gas that we are witnessing a crisis in which the import from the Iran.

Araji that Iraq's need of energy amounting to 18 000 MW and 13 000 MW located and actual reach 11 000 MW, adding that the Energy Committee in the Council of Ministers favors the introduction of investment in the electricity file and work on the sale of the old power stations and invest.

He pointed to the presence of 500 000 horseshoe on electricity in addition to the Ministry of Electricity in which 60 000 employees surplus explaining that he had been informed of the government to involve Parliament debates the Committee on Energy, "pointing out that" The oil ministry was interested in the previous phase extraction, stressing that the export of oil reached yesterday 3.304 million barrels, except for Kirkuk and the Kurdistan region realized a boom for the first time, adding that the refinery in Maysan in the process of assignment as work continues in the refinery in Karbala million barrel increase expected in the coming year.

He pointed to the existence of negotiations with the Jordanian side to deliver the Basra oil Aqaba to implement the project at a cost of $ 20 billion to be D pipeline across Najaf province to the border with Jordan after it was planned that passes through Ramadi, calling for rationalizing water consumption, noting that the dispute between the The government and the Kurdistan region is otherwise technician and that any defect in the oil production from the region will be irreducible allocated from the budget of the province of proportion, calling for an end to the dispute through dialogue and in accordance with the Constitution.

In the interventions of the House of Representatives between Aris MP Abdullah, head of the parliamentary energy committee that the absence of a law regulating the oil and gas is one of the causes of the current problems and wondered about the possibility of legislation to oil private law.

MP Adnan al-Janabi has inquired about the role of the Committee on Energy to accelerate the arrival of gas to the power plants.

She MP Hanan al ministries to the need to review procedures within the Committee on Energy to supply kerosene generators for the purpose of processing citizens.

For his part, MP Habib Terminal that the announcement of the fact that the electricity issue is still in the early stages puts a big question mark on the fate of the money that has been disbursed.

The MP pointed to the net and stumbled in the presence of the establishment of power stations.

He asked MP Mohammad Darraji on the action taken in how to facilitate and encourage investment in the power sector in all governorates of Iraq.

The MP said Amira Abdel-Karim and a number of power stations in Kirkuk need rehabilitation.

In turn inquired high Nassif MP for the nature of the legal measures taken to ensure the rights of the provinces over oil and the economic feasibility of the Japanese loan.

The MP Sirwan Abdullah that the continuation of current policies will push the region to look for outlets to provide financial liquidity to pay employees' salaries.

He expressed MP Mohammed Naji surprise at the huge money has been spent long years to prove that buy electricity cheaper than its production.

He stressed MP Mohammed al-Tai on the oil, gas and water included in the concept of energy and there are a waste of gas associated with oil and water are Mtatmd in the province of Basra.

He asked MP Abdul Kahar Samurai for actions taken on the rehabilitation of the liberated areas and provide mechanisms for maintenance of electrical stations.

In response to the interventions noted Deputy Prime Minister that the draft oil and gas law will be presented soon to the Council of Ministers, pointing out that the provinces of Najaf, Samawa and Babylon are processed low rates of electricity because of the fuel, explaining that the connector for electricity comes from Mosul Dam where you can not keep the water quantities that produce electricity or stored indicating that the Commission does not interfere the work of the ministries.

He pointed to progress in obstetrics despite the fact that electricity in the early stages, but progress to Aaoizi what has been spent, it was also awarded the 7500 Mika for the purpose of investing in electricity. "

He said al-Araji, said there convinced the government that the presence of the interests of the neighboring countries with the protection of national interests will achieve security in the country, noting that the government supported the oil derivatives $ 500 million in the first half of the current year, stressing that the majority of Basra reach them electricity for 20 hours a day except for two regions .

The Deputy Prime Minister said the Energy Commission decided to expand in the establishment of refineries, particularly in the central provinces, stressing the absence of any blockade of the region because the government recognizes the Kurdistan Regional financial stake, adding that Kirkuk's oil is of the federal government and the oil region of the province and there is no any political disagreements.

He explained that the lack of justice in the distribution of electricity to the electricity grid and is linked to exposure to the terrorist attacks, stressing that the licensing rounds useful being led to increase oil production rates but there is exaggeration in the money exchange in implementation.

On the other hand, he warned first deputy chairman of the House of Representatives Hamoudi of a crisis in the water during the coming period, stressing that the government will take political action through negotiation with Turkey to increase the share of water and the other military.

For his part, Hussein Ali Murtaza agricultural adviser in the prime minister that Daash controls the water column in the Euphrates River in addition to the loss of large amounts of water on the hands of some parties, pointing out that even in the event that Turkey firing amounts of water will be storing the Daash releases Dam tenderness in alluding to the existence of a package of measures for the protection of water, and calling for the exercise of political pressure on Iran and Turkey to increase water releases on the Tigris River.

For his part, praised Hamoudi al-Araji, to attend to the Council.

This was followed by the Committee on Agriculture, water and marshes statement on water crisis Basin Euphrates indicated it to the deterioration in the economic, social and environmental situation in some central and southern governorates, expressing its deep concern for water crisis in the coming period, calling for the formation of an official delegation to ask the neighboring countries to increase water releases, particularly in Euphrates river basin and to the Ministry of Water Resources, in coordination with the Ministry of Defense to protect water installations and secure and Ministry of Water Resources Water sufficient revenues from the Tigris River to feed the marshes as well as claim the ministries concerned to play a key role in the relief population of the affected areas.

On the other hand Hamoudi announced the withdrawal of an objection previously submitted to manual voting, which was to take Mohammed's Darraji minister of industry, noting that the vote, which took place in the previous legislative term officially became.

Later, the owner Mohammed Darraji was sworn in as minister of industry.

In another context display MP Raad Aldhlki Chairman of the displaced persons and deportees request signed by more than 40 deputies to the inclusion of displaced people in Turkey and Jordan in the same displaced benefits at home, while Mr. First Deputy President of the Council announced the postponement of the discussion to the next meeting and submit them to the next Saturday.
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Jubouri: waiting for the arrival of the oil and gas law for the legislation
House Speaker Salim al-Jubouri

  Author: Editor: ap, sz Reporter:
06/23/2015 12:54

Tomorrow Press / Baghdad: The head of the House of Representatives, Saleem al-Jubouri, Tuesday, that the House of Representatives awaiting the arrival of the oil and gas law, the Council of Ministers in order to read the legislation.

Jubouri said in a press conference attended by "tomorrow Press", "The House of Representatives awaiting the arrival of the oil and gas law, the Council of Ministers in order to read the legislation," noting that "the bilateral meeting that took place yesterday with the Prime Minister Haider al-Abadi discussed the basic legislation, including the oil law and gas. "

And exclude the Commission on oil and energy parliamentary approval of oil and gas law in the next legislative term of the House of Representatives, stressing that the terms of the bill a political agreement and there are internal agenda of trying to block the reading of personal and factional interests.

The draft oil and gas law made by the Council of Ministers was presented to the House of Representatives and read a preliminary reading during the month of March / 2007 bold and important step by the government and this draft, like the rest of the special laws projects, must-have thoroughly studied and discussed enough before they are issued by legislative power, especially in light of the present period experienced by Iraq.

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Oil Minister for} {Euphrates News: oil well the rest of the agreement and approval of the oil and gas law would end all problems

  2015/5/27 10:24 
Oil Minister for} {Euphrates News: oil well the rest of the agreement and approval of the oil and gas law would end all problems
{Baghdad: Euphrates News} Oil Minister Adel Abdul-Mahdi stressed that the oil deal with the Kurdistan region, "other well," noting that "approval of oil and gas law will end all computational problems with the territory."
He said Abdul-Mahdi told {Euphrates News} that "the oil accord to now other very well and is a strong", adding that "in recent days when we went to the Kurdistan increased delivery rates to {700} thousand barrels and we hope from now to the end of the month to be Muslim quantities close to the agreed upon ".
He pointed out that "the relationship with the region and good sound and explicit but will not solve all the problems there are and will remain stuck if you do things sitting province and the center to solve them."
He said Abdul-Mahdi, his speech by saying that "there are principles not developed because of the absence of oil and gas law," stressing that "the adoption of the oil and gas law will end all the problems calculations with the region so we have to sit down to put a final and constant adjustments of production and export in the share of the region and do not want to turn to the seller and the buyer ".
The oil agreement concluded by Oil Minister Adel Abdul-Mahdi with the Kurdistan Regional Government may solve a lot of problems between the two parties, and which had worsened in the previous government time, which returned to normal between the two sides and led to convergence through the negotiating delegations of both Baghdad and Erbil , visiting President of the Region Government Nechirvan Barzani to the capital and that the visit by the Prime Minister Haider al-Abadi to Arbil, which contributed to the dissolution of ice accumulated for nearly eight years, amid assurances by the federal and the Kurdistan region governments fully bound by the Agreement and its implementation on the ground; to end the tensile case and attractions that existed throughout those years. M ended



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Deputy Speaker of Parliament: Kurdistan is moving to implement the oil accord with Baghdad fully

Date: 30/04/2015 15:33




Information / Baghdad / ..
Deputy Chairman of the House of Representatives Iaram Sheikh Mohammed, Thursday, that the Kurdistan region is moving towards the implementation of the oil agreement between Baghdad and Erbil fully.
He said Petain to the Office of Sheikh Mohammed received by the agency / information / copy of it, "Deputy Speaker of Parliament Iaram Sheikh Mohammed met today, at the official office British Consul in Erbil Lencas Mackay," noting that "Sheikh Mohammed expressed regret what happened from the problems between the province and the center which had a negative impact on the livelihood of the Kurdish people. "
The Sheikh Mohammed, according to the statement that "the daily sustenance of the Kurdish people has become part of the conflict and political differences, and today the region paced serious steps to implement the oil agreement."
The Deputy Speaker of Parliament that "the current economic crisis is an opportunity to review and re-evaluation and that can be utilized officials in the region of this phase to avoid problems in the future and it is very necessary to accelerate the economic and financial reform in Kurdistan."
For his part, the British Consul "stressed continued support and assistance to Iraq and the Kurdistan region and efforts to reach rapprochement between the province and the center and resolve the outstanding issues and files. Ended / 25

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Parliamentary Oil: Kurdistan Issued 450,000 barrels per day within Sumo


05/04/2015

Parliamentary oil: Kurdistan issued 450 000 barrels per day within Sumo


BAGHDAD / JD / .. suggested the Commission on oil and energy parliamentary, the arrival of the Kurdistan oil export rates to 550 000 barrels per day during the next two months, while noting that the Kurdistan currently exports 450 000 barrels per day within the national SOMO.
A member of the Committee MP Ibrahim Bahr al-Ulum told / KD / The "oil export rates began to increase in a row and months where he achieved last month standard rate unprecedented for Iraq to achieve since the eighties of the last century, especially after the export of the Kurdistan region 450 000 barrels per day within the national system for export."
He added that "according to current indicators, the Kurdistan region will be able to export 550 000 barrels per day during the next two months and thus been able to fulfill the Kurdistan oil Convention concluded with the federal government on oil," ./ ended / 8 /





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ATTACHED AT THE BOTTOM OF THIS PAGE  AND DOWNLOADABLE IS ANOTHER REPORT AND IT IS IRAQ'S

Summarized Final Report of the Iraq’s Integrated National Energy Strategy

Iraq is endowed with one of the world’s richest supplies of oil and gas.  Properly developed, this endowment can be the foundation of a diverse, productive, and continually growing economy.  In order to realize this potential, Iraq needs strategic clarity in two areas.  The first area is economic, involving resource allocation and capital investments. The second is institutional, involving accountabilities, capabilities, governance, and industry structure.

Because multiple institutions must work together to accomplish the purposes of an integrated energy strategy, a clear economic roadmap is needed that sets a shared agenda.  Because that agenda can be accomplished only through effective management of a large number of complex, interconnected tasks, strong institutional roles and capabilities also are needed.   The INES recognizes this dual need for economic and institutional direction, and provides recommendations in both areas.

Making the Iraqi Revenue-Generating Deal Work

Michael Knights

December 3, 2014

Leaders in Baghdad and Iraqi Kurdistan have taken a brave step toward reunifying the country through revenue sharing. The United States should support implementation of the deal.

On December 1 and 2, the federal Iraqi government and Kurdistan Regional Government (KRG) conducted three rounds of negotiations in Baghdad over the sharing of oil revenues in the 2015 budget. The talks marked the culmination of three months of intensifying discussion between federal and Kurdish leaders, which followed more than a year of U.S.-supported discussions between the two sides. The agreement also came against the backdrop of extremely challenging fiscal circumstances for Iraq caused by plummeting oil prices. The arrangement that emerged is foremost a "revenue-generating" rather than a "revenue-sharing" deal because it has been carefully crafted to generate new revenues for both Baghdad and the Kurds.

THE DRAFT BAGHDAD-KRG DEAL

In most years since the fall of Saddam Hussein's regime, the Iraqi federal government instituted a customary form of revenue sharing with the KRG, a subnational entity that encompasses three of Iraq's eighteen provinces. Based on a United Nations estimate that the Kurds constituted 17 percent of Iraq's population, the Kurds received 17 percent of Iraq's net state revenues (gross revenues minus sovereign expenses such as the military and federal oil-contractor payments). As a result, the Kurdish share of Iraqi gross revenues was actually around 11 percent, and dropped year after year as sovereign expenses grew. Against fiscal nitpicking between Baghdad and Erbil over revenue sharing, the Kurds began to independently produce and export oil. Baghdad sought to force the Kurds to contribute this oil to the federal export system, run by the State Oil Marketing Organization (SOMO), inserting punitive language into the 2013 and 2014 budgets to withhold Kurdish monthly budget transfers if SOMO did not receive the prescribed volumes of oil.

In early 2014, the government of Prime Minister Nouri al-Maliki acted on this threat, pushing the Kurds to the brink of bankruptcy and driving them to accelerate their independent oil exports to 300,000 barrels per day (bpd) in November 2014. This independent oil sales path has proceeded very successfully in 2014. Of the twenty-six tanker loads of KRG crude exported by November 1, twenty-five have been bought and paid into Kurdish-controlled bank accounts. The KRG is now exporting around 300,000 bpd of crude through a combination of pipeline and trucked exports. This means that after various deducted expenses, including contractor costs, the KRG can now draw on monthly revenues of around $380 million to set against its monthly salary requirements of around $670 million.

Under the auspices of U.S.-backed reconciliation talks, Baghdad and the KRG have been feeling their way toward a revenue-sharing deal for most of the last year. A deal almost unfolded in March 2014 whereby the KRG would allow its oil to be jointly marketed but only if Baghdad increased Kurdistan's share of Iraqi gross revenues by shaving $14 billion in federal petroleum costs off Iraq's sovereign expenses. Then, in November 2014 the KRG activated a long-planned confidence-building initiative, providing 150,000 bpd of oil to SOMO at the Turkish port of Ceyhan for the last fifteen days of November in return for a onetime payment to the KRG of $500 million. The new deal struck in recent days needs to be written into Iraq's draft 2015 budget law, and provides strong incentives to both Baghdad and the KRG to reintegrate their oil production and export activities.

  • What Baghdad gets. The draft deal includes a KRG commitment to provide 250,000 bpd of KRG export blend to SOMO at Ceyhan, whereupon SOMO sells the oil using the same mechanisms used for selling oil from Basra or elsewhere in federally administered Iraq. The KRG also agrees to facilitate SOMO's export of 300,000 bpd of oil from the federally administered Kirkuk oil fields. Such oil cannot reach export terminals via federal territory due to insecurity and the destruction of pipeline infrastructure between Kirkuk and Mosul. Instead, Kirkuk oil might be exported via the KRG's secure internal pipeline network to Turkey. This combined 550,000 bpd of new exports will generate just under a billion dollars a month for Baghdad. As a goodwill gesture, the KRG is already providing SOMO with 150,000 bpd of KRG export blend at Ceyhan for the remainder of 2014.
  • What Kurdistan gets. As a reciprocal goodwill gesture, Baghdad will grant the KRG a new $500 million payment in December 2014 to ease near-term budget pressure. Throughout 2015, the Kurds will see their monthly budget transfers from Baghdad restored. (If oil prices allow a $60 per barrel "netback" -- net revenue after production costs -- for Iraq, and if Iraqi export volumes are in the expected range of around three million bpd, the Kurds will receive around $600 million per month). The Kurds have not achieved a capping or significant reduction of sovereign expenses, but they will, for the first time, receive around $100 million in monthly salaries for their peshmerga fighters as a line item of the Iraqi Ministry of Defense budget -- in addition to their monthly transfers from the federal budget. In addition to these agreed items, there is a high probability that the KRG will implicitly maintain control of all KRG oil production in excess of the 250,000 bpd transferred to SOMO. This excess is currently 150,000 bpd and could be as high as 250,000 bpd by the second half of 2015. After satisfying domestic refining requirements of around 120,000 bpd, the Kurds will independently export the remainder and access further revenues in this manner, in part to pay their contractors -- who are not covered under federal petroleum costs.

U.S. SUPPORT FOR IMPLEMENTATION

Delivered through the energetic midwifery of Iraqi minister of oil Adil Abdulmahdi, the December 2 agreement between Iraqi prime minister Haider al-Abadi and KRG prime minister Nechirvan Barzani now needs to be approved by Iraq's body politic and institutionalized in the forthcoming 2015 budget. Key milestones and challenges include:

  • Drafting the 2015 budget. The devil is often in the details, and now specific language must be written into the new budget law by a special committee charged with drafting the legislation. To stand the best chance of success, the budget needs to give Iraqi politicians as much latitude as possible in meeting the agreed oil volume targets. This may mean tiptoeing around issues like the KRG's use of excess oil production over 250,000 bpd. Likewise, as noted, the 2013 and 2014 budgets included punitive clauses concerning KRG nondelivery of oil. New efforts to include tough language in the 2015 budget could derail the initiative. All parties entered the current agreement voluntarily, due to mutual economic need and largely driven by domestic Iraqi considerations -- not international pressure, in a departure from previous revenue-sharing initiatives. Both sides can therefore afford to accentuate the positive and demonstrate good faith without issuing punitive threats. In general, the United States should offer its good offices during the drafting process to iron out misunderstandings and guide all parties to keep the budget language positive and not overly detailed.
  • Ratifying the budget. The budget law needs to be ratified by a simple majority of the 328-seat Iraqi Council of Representatives. The United States should back all efforts by the Abadi government to build consensus for the budget. One potential source of opposition will be the fifteen non-KRG provinces, which receive services through the federal ministries and whose direct per-capita transfers from the federal government are much smaller than those received by the KRG. (Erbil funds its own ministries from the monthly transfers). Oil-producing provinces like Basra may be particularly disgruntled given that they produce oil but cannot directly sell any portion of it, as the Kurds do. U.S. officials and other international actors should reassure such provinces that they will support provincial demands to receive petrodollar royalties in the budget and foreign direct investment, and help develop project management capacity at the provincial level. Likewise, the United States can advise and assist emerging Iraqi government plans to establish Central Bank of Iraq-funded commercial and industrial development banks to provide loans to local businesses within the provinces.
  • Keeping the deal alive. Any Baghdad-KRG deal will need to be monitored for lapses in implementation. With a Kurd, Hoshyar Zebari, heading Iraq's Ministry of Finance, and with monthly transfers flowing automatically once the budget is approved, the basic implementation of a deal may not be too complex or fragile. The payment of monthly peshmerga salaries introduces an element that could potentially be delayed by Baghdad politics, given that the defense minister needs to approve each payment. Using its leverage as a major security-cooperation partner, the United States should closely track these payments to prevent backsliding.
  • Coping with oil price volatility. If the average price for Iraqi oil is $70, Iraq's netback is $60. In that case, the draft deal results in the KRG receiving just under $690 million per month from Baghdad -- $600 million in budget transfers plus $88.5 million in peshmerga salaries -- and may allow the KRG to receive around $300 million in monthly independent oil exports as well by mid-2015. This will more than cover the KRG's monthly salaries, which as noted are around $670 million. In a price scenario in which oil prices drop to $40 (with netback to Iraq of around $30 per barrel), both Baghdad and the KRG are critically underfunded. More important, the Kurds could be tempted to withdraw from the deal so as to make about $170 million more a month by independently selling all the KRG and Kirkuk crude -- assuming they still had access to this and Turkey agreed -- from which they would get $685 million a month, as compared to about $515 million a month under the deal. The United States needs to pay careful attention to the calculations of both sides, particularly if they are under severe fiscal distress due to further oil price reductions. Turkey offers the best means of pressuring the Kurds to forgo destabilizing moves around Kirkuk. 
  • Exporting Kirkuk's oil. SOMO's export of Kirkuk crude is vital to ensuring Baghdad's fiscal upside in the deal, but building Kirkuk exports up to 300,000 bpd will not be easy. Since July, the KRG has extracted more than 120,000 bpd from Bai Hassan and Avana, oil fields that have historically been administered by the federal government's Northern Oil Company (NOC) and are considered "Kirkuk fields" by most Iraqi officials. There will undoubtedly be calls during 2015 for SOMO to regain access to oil from these fields. Baghdad will also seek help from international oil companies to boost production at the remaining NOC-administered Baba field, involvement that the Kurds have previously opposed due to Kirkuk's disputed status. Alternatively, the Kurds may seek to play a larger role within the NOC. U.S. mediation could prove very valuable in resolving disputes and finding common ground in these sensitive locations.

The draft agreement announced December 2 represents a brave step by prime ministers Abadi and Barzani, who are ably supported by oil ministers Abdulmahdi for the federal Iraqi government and Ashti Hawrami for the Kurds. The deal could be cynically used by either side to relieve short-term fiscal and political pressures, with no real commitment to see the agreement through in 2015. But if the deal catches on and is implemented, some profoundly positive outcomes could flow out of a workable revenue-maximizing and revenue-sharing deal in 2015. Export of 550,000 bpd of oil will buttress a desperately overstretched Iraqi war economy. Cooperation in the war against the Islamic State of Iraq and al-Sham, or ISIS, can be optimized, improving the chances of a joint federal-Kurdish recapture of Mosul in the first half of 2015. The basic fabric of Iraq might not only survive but even be strengthened by a successful experience of intercommunal power sharing. As Abdulmahdi said on November 20 at the Atlantic Council Summit in Istanbul: "Oil since the foundation of Iraq has been a reason for wars, and disputes. Now we want it to be a reason for peace, and cooperation."

Michael Knights is a Boston-based Lafer Fellow with The Washington Institute.

https://www.washingtoninstitute.org/policy-analysis/view/26542

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MNR Welcomes Passage of Oil & Gas Revenue Fund Law Through Kurdistan Parliament

Erbil, Kurdistan Region, Iraq (mnr.krg.org) -The Ministry of Natural Resources (MNR) welcomes the passage of the Oil & Gas Revenue Fund law through the Kurdistan Parliament and congratulates the people of the Kurdistan Region, the members of parliament, and the Kurdistan Regional Government Council of Ministers for the entry of the law into the Region’s statute books. MNR will ensure that the new legislation is implemented as soon as possible.

The Oil and Gas Revenue Fund law authorizes the Council of Ministers to nominate a board, approved by the Parliament, that will provide public accounts for the revenue that the KRG accrues from oil exports, refined products, and oil company bonuses within the framework of the KRG’s oil and gas contracts, the Kurdistan Oil and Gas Law no 22 of 2007 and the Iraq Constitution of 2005.

The Oil and Gas Revenue Fund is an important institutional  development in the KRG, and was instigated and sponsored by MNR to bolster transparency in the oil and gas sector.

Under the Law, oil revenues may be allocated for the following categories: the Kurdistan Region's annual budget; investment spending; oil infrastructure; environmental protection; and a “future generation’s” wealth fund.

The Fund will act as an accounting mechanism and will improve public understanding of how much money the KRG generates from its independent oil exports and refined products. It will also lead to greater public awareness that oil revenues are transferred and audited in line with international standards.

MNR foresaw the need for such a revenue law and inserted a provision in this regard in Article 16 of the Kurdistan Region’s Oil and Gas Law no 22 of 2007.

Under MNR’s initiative, the first draft of the law was submitted to parliament in 2011, but the parliament term ended before that law could be debated.

The draft was then redrawn by MNR and the Council of Minister’s legal advisors, and returned to parliament in early 2013. There were initial discussions, but the draft again got stuck and the parliament finished without passing it into law.

The Council of Ministers subsequently withdrew the draft law to make it consistent with Law No 5 of 2013, and returned it to parliament in October 2014. Over the last 6 months, the new draft law was discussed and debated in detail by MPs, who voted it through last week.

Welcoming the new legislation, Natural Resources Minister Ashti Hawrami said: “This is an important for the people of the Kurdistan Region. It is another building block in the institutional development of our oil and gas sector. It will aid public understanding of the inflows and outflows of oil revenues, and it is in line with Kurdistan’s oil and gas law and the Iraqi Constitution.”

Minister Hawrami added that other legislation provided for in the Oil & Gas Law of 2007 remained pending in parliament, including an MNR-sponsored bill to establish the Kurdistan Exploration and Production Company (KEPCO). Another MNR-sponsored bill relating to the official marketing of Kurdistan’s oil (KOMO) is ready to be sent to parliament soon. “We hope the Kurdistan Parliament will give priority to debating these important draft laws as soon as possible,” Minister Hawrami said.


Written by AAB Category: PRESS RELEASES  Published: 07 April 2015

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Insert the oil and gas law in the next session of parliament

خلاطي : إدراج قانون النفط والغاز في جلسة البرلمان المقبلة

Khalati: Insert the oil and gas law in the next session of parliament

Special / newspaper integrity / Osama success - confirmed citizen Bloc member Hassan Khalati, that the general budget entirely dependent on oil imports is needed to expedite the enactment of the oil and gas law, which ensures that regulate the relationship between the governments of the center and Iraqi Kurdistan.

Khalati said in a statement (newspaper integrity) that "the next House of Representatives sessions will see the inclusion of oil and gas law on its agenda for the purpose of reading and discussion by the political blocs."

He explained that "the Act is important because it solves many of the problems that exist between Iraqi Kurdistan and the federal government and between the oil-producing provinces and therefore this law will set the oil policy in the country, noting that" there is a wide interest by the parliamentary blocs to complete the enactment of this law, the fact that the state budget is based totally dependent on the proceeds of oil resources.

The MP for the coalition of citizen that "the nuclear deal between the United States and other major powers and Iran would be in favor of Iraq and is in line with the aspirations of the stability and the start of a new chapter of harmony between different At.anthy 4

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Vice Kurdistan: the oil agreement between Kurdistan and the federal government has already become law

3/5/2015



MP for the PUK Ardalan Noureddine the latest oil deal between Kurdistan and the federal government has already become law Ardalan In an interview with the TV channel said that some of the trend speaks about the possibility of agreement or cancel with the fact that this agreement has already become law after a binding for all after he entered in the federal budget for 2015 approved by the House of Representatives recently The Kurdistan Alliance MP capable Mohammed said in a statement that "the odds of Baghdad and Erbil on the oil agreement, economic reasons in conjunction with the crisis experienced by the country and the need to export larger quantities of oil." Mohammed said that "what happened last intersection, does not rise to the level of crisis, but rather a simple barrier can be resolved through dialogue," stressing "the determination of the parties to agree on the implementation of the oil clauses full form."


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http://tinyurl.com/m5hrj3p


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Abdul-Mahdi: Iraq will become the first of the five countries in the areas of oil and gas

Follow-up _sahifah integrity _okd Oil Minister Adel Abdul-Mahdi, that his ministry was working on the development of energy sources and seeking to attract investment according to a comprehensive development plan,

As pointed out that Iraq will increase oil and gas reserves to become the first of the five countries in the fields.

Said Abdul-Mahdi, in a press release seen by (newspaper righteousness) that "Iraq has a great wealth of oil and gas was one of the first Arab oil-producing countries in the twenties of the last century," he said, adding that "The oil ministry was working on the development of energy sources and seeking to attract investment according to plan comprehensive developmental cooperation and coordination with many countries and international institutions and companies. "

He added that "Iraq will increase oil and gas reserves to become the first of the five countries in the fields", stressing that "it is hoped that Iraq remains as the last countries that depend upon the world to provide him with at least a tow important energy from oil."

And the oil minister that "Iraq is thinking

عبد المهدي: العراق سيصبح من الدول الخمس الاولى في مجالي النفط والغاز

to develop other sources of new and renewable energy," explaining that "new and alternative such as solar, wind and other energy sources will advance and occupies a growing niche in the world of tomorrow."

The Oil Ministry announced, last year, a rise of Iraq's oil reserves to quadruple production, while confirming that it continues to increase until there is a large reserve for future generations. Ended 11

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Future Uncertain for Baghdad-Erbil Oil Deal

Posted on 27 November 2014 . Tags: Bank of Kurdistan, KRG, oil exports, SOMO, State Oil Marketing Organization

By Mohammed A. Salih for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

While a recent deal between Baghdad and Erbil to export oil from the northern fields is seen by many as a breakthrough after years of stalemate, the prospect of further progress on oil exports still remains uncertain.

On Nov. 13, Iraq’s oil minister, Adil Abdul-Mahdi, and Iraqi Kurdish authorities reached a deal whereby the Kurdistan Regional Government (KRG) will export 150,000 barrels of oil per day.

In return, the Baghdad government will possibly deliver as much as $1 billion to the KRG, which has been struggling to pay its employees and fund public projects ever since the central authorities in Baghdad cut its budget in February.

The very terms of the deal, however, still remain somewhat vague. The KRG’s official website stated Nov. 13 that the federal authorities in Baghdad will pay $500 million to the Iraqi Kurdish government, and that the KRG will place “150,000 barrels a day of crude oil” at the disposal of the Iraqi government.

A day later, the Iraqi Ministry of Oil issued a statement reiterating the same information.

But during a joint press conference with Turkish Prime Minister Ahmet Davutoglu on Nov. 21, KRG President Massoud Barzani offered new details on the amount of the payment and where the oil would come from.

“We have agreed that Baghdad will send $1 billion to [Iraqi] Kurdistan through two $500 million installments and in return we will export 150,000 barrels of oil per day from Kirkuk,” said Barzani.

His statement amounted to a bombshell as the figure he gave was higher than previously stated, and he also said the oil will come from Kirkuk’s oil fields, a detail not disclosed officially before.

Earlier, on Nov. 17, Iraq’s oil minister had denied during a parliamentary meeting that the deal was conceived as paying the KRG for giving the oil under its control to the central government.

But that appears to be how the deal is perceived among its critics.

Saad al-Mutalebi, a member of the Shiite State of Law Coalition and a politician close to former Prime Minister Nouri al-Maliki, described the deal as “unrealistic.”

“[The deal] will cause problems larger than those that exist at the moment,” Mutalebi told Al-Monitor. He has been a vocal proponent for greater powers for the Iraqi government versus the KRG. “The agreement is that the KRG allows the government of Iraq to export Kirkuk oil and … the oil in Kirkuk belongs to the federal government.”

When the Islamic State (IS) swept through large parts of northern and western Iraq in June, the Kurdish peshmerga forces brought Kirkuk under their firm control as Iraqi army units deserted their posts there, fearing an IS onslaught. Ever since, oil exports from Kirkuk to the Turkish port city of Ceyhan have stopped, causing the Iraqi government a significant loss of revenue while it is locked in a brutal conflict with IS.

The KRG says it now produces around 300,000 barrels of oil per day. Past oil figures from the authorities show that before June the Kirkuk oil fields exported between 300,000 to almost half a million barrels of oil per day, depending on the technical capabilities and readiness.

Mutalebi’s view is shared by many in Baghdad. During a parliamentary session on Nov. 17 where Abdul-Mahdi tried to convince the lawmakers about his deal with the KRG, he faced harsh criticism, particularly from pro-Maliki lawmakers.

Hanan al-Fatlawi, a lawmaker and ardent supporter of Maliki, questioned the wisdom of the deal during the parliamentary meeting.

Later that day in a Facebook post, she dubbed the agreement a “national calamity” because it leaves the KRG free to handle as it pleases the remainder of the oil it produces.

In an attempt to ward off criticism, the Iraqi oil minister has said the deal “does not constitute a final solution” but is only a step toward a broader solution.

“The deal if respected … will guarantee that [the revenues for] up to 1 million barrels of oil per day from [Iraqi] Kurdistan, Kirkuk and northern fields, will return to the [national government’s] treasury; that is tens of billions of dollars that we lost during 2014,” said Abdul-Mahdi in a statement dated Nov. 14.

Abdul-Mahdi, however, has not said whether the oil will come from Kirkuk’s oil fields and appears to have decided to remain vague on that matter.

The challenge for Iraqi authorities is to justify the deal as it amounts to an acknowledgement of the KRG’s de facto control over the oil fields of Kirkuk, an anathema to many non-Kurdish Iraqis.

But to many in Iraqi Kurdistan, that is already the case.

“The deal is in Baghdad’s interest, otherwise it cannot sell Kirkuk’s oil,” Sherko Jawdat, chairman of the energy committee in Iraqi Kurdistan’s parliament, told Al-Monitor. “This is a preliminary deal and will be followed by bigger steps.”

The KRG and Baghdad have been in deep disagreement for much of the past decade over controlling the production and export of oil from Kurdish territories.

Article 112 of the Iraqi Constitution grants the central government the right to jointly manage with provincial and regional governments the “present fields.” The term “present fields” is interpreted by Kurds as those that were in operation when the constitution was written in 2005. The vast majority of Iraqi Kurdistan’s oil fields were explored and developed after that date.

Even though the KRG has had a difficult time selling its oil on the international market due to threats of legal action by the Iraqi government and strong opposition from the United States, it has adamantly refused to let the Iraqi national oil marketing company, SOMO, control oil exports from the Kurdistan region proper, which constitutes the three provinces of Erbil, Sulaimaniyah and Dahuk, in addition to smaller areas of Ninevah, Diyala and Kirkuk provinces.

In light of such past opposition, it remains highly questionable whether and under what terms the KRG will agree to place all the oil it controls — which now includes Kirkuk and other contested territories — at the disposal of the Iraqi government, as Abdul-Mahdi’s statement envisioned.

Without a solid agreement over SOMO’s role in Kurdish oil exports, it will quite likely be difficult for the Iraqi government to maintain the current deal due to heavy pressure from non-Kurdish circles in Baghdad.

“I don’t believe the Kurdistan region will export its own oil through SOMO,” Jawdat, the Kurdish lawmaker, said.zx“““““

But Jawdat said another solution could be possible in the form of the KRG selling its oil and keeping the Iraqi government in the loop on its production and export activities. In that case, he said the KRG will still have to send the revenues to the federal government’s coffers in Baghdad to be redistributed nationally.

http://www.iraq-businessnews.com/2014/11/27/future-uncertain-for-baghdad-erbil-oil-deal/

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Oil & Gas Law Key to Resolving Issues

Posted on 16 July 2013

Translated from Al-Hayat by Abdel Wahed Tohmeh, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi Kurdistan Region Natural Resources Minister Ashti Hawrami (pictured) said that the shares of oil companies operating in the region have exceeded $3.5 billion. He stressed the importance of the oil and gas law’s enactment, and estimated that oil reserves in the three Kurdish governorates are at more than 45 billion barrels.

In an interview with Al-Hayat, Hawrami said that the negotiations with Baghdad will be in accordance with the law, which determines the Kurdistan region’s financial share of federal revenues. “The provincial government informed Baghdad at the beginning of this year that the investing companies requested more than $3.5 billion [in shares], and they are constitutionally entitled to this,” he said.

He denied Baghdad’s accusations that the region is exporting crude oil without coordinating with Baghdad, adding, “This is taking place under an agreement with Baghdad to export our production, on the condition that 50% of proceeds is deducted to pay companies’ dues, while the other 50% is kept by the state treasury. However, all the proceeds were seized.”

He denied rumors of smuggling, saying, “There is no oil smuggling, we do not accept such cheap accusations. What was claimed is a legal entitlement and it came because we forbid them from grabbing it.” He criticized the current management of the country’s imports, which “still follows the methods of the former regime and include laws that are imposed on us by force from the federal government.”

Hawrami demanded that the central government provide the region with the 55 million barrels of fuel “that we did not receive from 2004 to 2012, and that are needed for domestic consumption.”

Hawrami stressed the need to enact the oil and gas law, and said, “The law, which we are seeking to pass according to the constitution, will be the key for all the contentious issues between the two sides in the oil sector.”

During a joint news conference with Kurdistan Region of Iraq President Massoud Barzani on Sunday, July 7, Iraqi Prime Minister Nouri al-Maliki said, “There are no disputes between the federal government and the provincial government, it is merely a divergence in views regarding the Constitution.” Hawrami continued, “Most of the differences are political and they arise from the non-application of the Constitution in relation to the distribution of proceeds.”

Article 112 of the Iraqi Constitution stipulates: “The federal government with the producing governorates and regional governments shall undertake the management of oil and gas extracted from current fields provided that it distributes oil and gas revenues in a fair manner in proportion to the population distribution in all parts of the country with a set allotment for a set time for the damaged regions.”

The article stresses, “The federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas extracted from current fields provided that it distributes oil and gas revenues in a fair manner in proportion to the population distribution in all parts of the country with a set allotment for a set time for the damaged regions.”

Hawrami downplayed the importance of the pressure exerted by Baghdad on oil companies operating in the region to discourage them from implementing the contracts. “This does not affect the work of these companies and they are ready to continue despite the delay in payment of their dues,” he added.

“Crude oil reserves in the Kurdistan region, excluding the disputed areas, are at 45 billion barrels, and possibly even more. Yet the preliminary gas estimates are at 100 or 200 trillion cubic meters,” he said. Concerning his ministry’s plans to increase production in the coming period, he said, “The target production for 2015 is 1 million barrels per day, reaching 2 million barrels per day in 2019. As for the refining of crude oil and the production of hydrocarbons, they are estimated to increase to 150,000 barrels per day, and could reach up to 250,000.”

http://www.iraq-businessnews.com/2013/07/16/oil-gas-law-key-to-resolving-issues/

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Commission on oil and energy calls for the adoption of the law of oil and gas (HCL)

11/20/2012

in the absence of state institutions and the rule of the partisan nature of the decisions of the government, media reported earlier decision to lift the Ministry of oil prices of oil derivatives, which aroused the resentment of a number of deputies of the Commission on oil and energy parliamentary.

He stressed a number of MPs on the need to consult the relevant committees before the government issues any decision, especially decisions that are of direct contact with the citizens.

For its part, denied the distribution of Baghdad of petroleum products reported higher fuel, saying that “this news unfounded.” of the oil and energy “resentful” criticized the Commission on oil and energy parliamentary decisions taken suddenly by the government, and especially decisions that are in direct contact citizen.

member of the Commission on oil and energy parliamentary Furat al-Shara expressed his criticism of the decisions issued by the government abruptly, returned her decisions ” abnormal and cause fissures of the political situation, “explaining that his committee is not satisfied and” resentful “of these behaviors.

In an exclusive interview for “long” explained Shara to make these decisions without reference to parliament lead to “darkness and contrast of transparency and political logic and state institutions”, stressing the need for the adoption of the law of oil and gas to reduce the abnormal behavior and that there are many observations.

He said. between Shara “We had Maatbaat many through committee and through Member” person to person “and the day before yesterday, and demanded that there should attend the Committee of Five, which was established and named Committee thumbnails on oil and gas law, in order to be there to inform and clear heuristic “.

decisions unconstitutional! member of the Committee on the economy and investment in the House of Representatives Qusay al-Abadi counting decisions taken by the government without reference to the relevant committees in the House of Representatives “constitutionally” It powers of government and is not within the powers of the House of Representatives.

explained Abbadi Speaking “long” that ” House’s mission is the delivery point of view to the concerned authority, but it is not necessary to take this view. “

He emphasized that “supposed the opinion of all parties and all political blocs and even the Iraqi street before the adoption of any law, especially laws pertaining to the citizen.”

Moreover, it was his colleague in the MP for the National Alliance Susan Saad had warned in previous press statements from continuing to take decisions without reference to the House of Representatives, noting that this “will raise great feedback to its members and will pay some to his suspension within the parliament.”

She said. called Saad Council of Ministers and the Ministry of Oil to “consult with members of the House of Representatives in the decisions and important laws that affect people’s interest before issuing to the Iraqi arena and raise concerns of ordinary citizens.” state “no decision”! former MP and Judge Wael Abdul Latif confirmed In an interview with the “long” that the state today not Skip one step toward building a state constitution and the law, describing the decisions taken by the government “no decision” Ppalartjalah and sudden and ill-considered, explaining that the government does not have any grounds for the application of those decisions.

stressed Abdul Latif on the need a motionless widely with political parties and civil society organizations, to discuss and study of strategic decision task that affect the fate of the people and the state before recognizing its important to put these decisions to the competent authorities, wondering at the same time on “How to make the state a decision what and then back him ? Is it reasonable, and after ten years, Iraq imports benzene and oil? “, and went on to say that:” it is not possible to state since 2003, and so far, you can not create five refineries giant at least after it entered the latest technology of the world?

” Following up that “in Hungary, for example there are oil refineries with a capacity of up to 50 thousand barrels per day administered by three staff members only, note that these refineries are created in a period not exceeding six months, is not supposed to government that moving towards these contracts?”.

http://bit.ly/Se2Ble


Positive results between GOI and Kurds; HCL final draft to be submitted over next 2 months

Parliamentary power: to agree on a final draft of the oil and gas over the next two months

10/31/2012 12:00 am

Praised the positive results between the central government and the Kurdistan Regional Government

suggested to the Commission on oil and energy out with a draft final law of oil and energy during the next two months to be approved under the dome of the House of Representatives after the talks positive that took place between the central government and the provincial government.

stressed Rapporteur of the Commission on oil and energy Qasim Mchkta on the importance of expediting approval of oil and gas law, saying in a statement the “Center Brief for the Iraqi Media Network,” that “the law of oil and gas from the laws very important that should speed up the approval,” pointing to the existence of many of the previous attempts that took place to enactment of this Act its importance.

added Mchkta “The last attempts were forming a committee five by the Presidency Council of Representatives was among the members of the committee and Oil Minister in the federal government and the Minister of Natural Resources in the Kurdistan region and was attending a positive factor for the approval of the draft one drafts exist.

between Mchkta that talks between the delegations of the central government and the Kurdistan region and attended by Deputy Prime Minister for Energy Shahristani have a positive effect and large, noting that the atmosphere has become reasonable and appropriate, especially with the added impetus to push the approval process and agree on a draft, likely to take place during the next two months to approve the One drafts that have not undergone obstacles and impediments new and stayed things are going in the footsteps positive.

Article (111) of the Constitution states that “oil and gas property of all the Iraqi people in all regions and provinces,” while Article (112) reads as follows: “First : The federal government will administer oil and gas extracted from current fields with the governments of producing regions and provinces, to be distributed and imports fairly commensurate with the population distribution in all parts of the country. “

either on the impact of oil and gas law to file oil, explained Deputy that failure to approve the law Oil affects file management oil, especially as the country’s imports 95 percent dependent on the oil sector, and that the absence of a law regulating this sector then be open in front of administrative and financial corruption with the lack of transparency and justice in the distribution of imports to the presence of law helps to regulate the sector and filling the door to corruption to maintain the interests of the Iraqi people.

He added that “the presence of the oil law will help to address many of the problems between the central government and the province because it regulates the powers and puts lines, which includes this sector”, saying: “I do not think there will be a beyond these lines and there is no need to exchange the center and the province charges and even if There was a bug can be processed there by law. “also confirmed a member of the Oil and Energy Committee Furat al-Shara in a statement the” Center Brief for the Iraqi Media Network, “that after the month of October this will be out a draft new law on oil and gas, it is hoped to be approved before the end of the year Current. “

Shara said that “the Commission pentagonal mini composed of the Minister of Petroleum federal government and the Minister of Natural Resources of the Kurdistan region in addition to representatives of the alliances which national and Iraqi Kurdistan is considering bills submitted in advance in the year 2007 and the year 2011 in order to be put a final draft of oil and gas law and adopted and passed to be passed in the House of Representatives, in addition to that he will be a study strategy for each project and find whichever is less axes controversial to be amended and agreed upon. “

as between Shara said that “failure to approve oil and gas law does not affect much in the file management of oil, according to licensing rounds that have passed already , where we are now witnessing a case of upward extraction and exploration in the case of progressive also in the field of exports, where just going from liquid gas end of the year 2016 and suffice of dry gas end 2017 “.

continued: he” Although the process of oil continues to the road, but the oil law The gas is very important in any country, in addition to that benefit the country transparency in dealings in general and benefit plan oil future, “adding that” the law of oil and gas is one of the important laws for the advancement of the Iraqi economy, as this law regulates relations between the federal government and the province of destination and regulates the relationship between giant companies invested national or foreign and between state institutions oil on the other. “

For his part, member of the Oil and Energy Committee Mutashar Samarrai he was forming a small committee ordered Diwani of five members of the Commission on oil and energy and five members of the legal committee to study the points of contention The agreement between the federal government and the province and was subsequently reducing the number of members to three of each committee. said he was talks between the Minister of Petroleum federal government and the Minister of Natural Resources of the Kurdistan region in the presence of the problem in advance and made ​​up of six members, to bring the views of get a unified vision and agreed upon by most attendees and so they can be adopted any draft offer, including the draft of 2007 or the draft submitted by the Council of Ministers in 2011.

as between samurai in a statement the “Center Brief for the Iraqi Media Network,” said node main cause confusion is to stop exporting oil of Kurdistan and the payment of dues to companies by the federal government, adding that he was overcome this obstacle by both parties.

and continued a member of the Committee that it was “unfortunate that a country like Iraq economy depends adoption almost entirely on oil wealth, which is the nerve President of the economy in the country and managed without law of oil and gas “, believing that” there is no law that regulates the relationship between the center and regions and provinces is associated province and producing oil and gas will open the door to the jurisprudence of all Laidlaw will intervene, “he said.

stressed Samurai” the importance of approving oil and gas law, which includes the construction of Federal Council for Oil and jointly by the influential powers in this area, as this Council will take it upon himself to remove all obstacles and to answer all questions regarding this regard what removes a lot of confusion existing, “expected to so they can be agreement, which begin providing draft agreed upon the parties for approval in the House of Representatives to resolve the crisis soon. provides version submitted by the Council of Ministers in 2011 as follows:

Article (5): “A council called (Federal Council for Oil and Gas) headed by the Prime Minister or his nominee. The Council is responsible for the following: -

a. Adoption of the federal policies of the petroleum industry and exploration plans and the development of the fields and the main pipe and plans adjusted.

B. Ratification of the instructions that include negotiation and contracting standards for licensing or development and production contracts and the eligibility criteria for companies.

C. Ratification of the models exploration and development contracts and production in accordance with the standards contained in this law and adjusted according to the classification fields or exploration areas as annexes to achieve the highest benefit to the Iraqi people.

D. Approval of contracts for exploration, development and production licenses granted to conduct petroleum operations and deciding where and modified.

E. To approve the funding and decide on the transfer of quotas between living with exploration and development licenses and production and inflicted such amendments to the contracts provided that they do not adversely affect the degree and quality of national participation and percentage in the project.. Ensure that the competent body to explore, develop and exploit sources of petroleum for verification of reserves of oil and gas and compensation of production and add new reserves and in the interests of the Iraqi people under the provisions of applicable laws and regulations and contractual terms and approved international standards.

“He also said al-Samarrai said that” So far, we did not take into account the ports export to Iraq, because there implementers only for the export of Iraqi oil and the two port southern port north and there are some problems and concerns with the countries bordering Iraq from the south and the north and Iraq must reckon outlets are numerous and alternative, “adding” there is no pipeline network inside Iraq must solve it , especially as the Iraq issue is now up to two and a quarter million barrels, while that Iraq can issue a total of six million barrels in the case provide the appropriate conditions. “

http://bit.ly/SeBtRT


Five-Member Committee meets tomorrow to reach a common formula for the oil and gas law

Date: 2012/03/29 16: 13: 25 p.m. Saturday

Baghdad (newsletter) …Said Deputy oil and Energy Committee and the Committee of five, the importance of temporary special Committee meeting to consider the draft oil and gas law, on Sunday, for a unified law for oil and gas regulated the relationship between the Federal Government and the provinces and prefectures in the province irregular oil field called promising opportunities to expand cooperation and investment with companies.

Temporary Special Committee includes in its membership both chroma Pushparaj State Minister for Parliament representing the National Alliance MP Adnan al-Janabi, Chairman of the Committee on oil and energy representing the Iraqi list, MP Farhad alatroshi representatives from the Kurdistan Alliance, as well as Abdel Karim of the Federal Oil Minister Faisel laibi washti hawrami Minister of petroleum and natural resources in Kurdistan.

Works under the supervision of the presiding officers of the Iraqi Council of representatives that seem bent on accelerating legislation during the next phase being a constitutional task that benefits are widespread attention on several levels locally, regionally and internationally.

Transfer statement to the House of representatives, received (News Agency news) on Saturday, the Vice-Chairman of the Committee for oil and gas on hospitality, as saying: the House of representatives and the Ministry of oil in the Central Government and the Kurdistan Committee to consider great importance being addressed the problems and existing powers and organization of productive forces.

Fayad said: we are committed to the Constitution and the Federal Government where we want oil industry westratget building to maintain national benefits by the Government towards the citizen and the explicit reference to article 111 and 112 wmafyha the powers of the Federal Government and effective participation in decision-making the most useful and worthwhile in Iraq.

And: a small Committee agreed to chair the House Legal Committee empowered by the Iraqi list and the National Alliance and the Kurdistan Alliance and the Federal Government’s oil Minister and oil Minister of wealth that represent the territory for a law protecting oil products put everyone before legal professional take all cases that serve the petroleum and process productivity.

The statement noted: the Attorney on hospitality, expressed his optimism to the outcome of the meetings of the Commission as a serious step of all parties to investigate Iraq’s interest as the project represents a lifeline to Iraq’s Renaissance and nation-building, noting: that all parties are serious steps to ensure important law legislation which protects citizens ‘ rights and the rights of companies that operate in Iraq and striving to maintain public money.

And MP Fayad: that government laws have priority over all laws made by the commissions, or even laws made during 2007 and 2008 and all drafts will be put on the table to reach a satisfactory result serving the national interest.

It said: that MP Farhad alatroshi temporary special Committee member, said: the Committee was formed after the last meeting of the legal Committee and oil two weeks ago and reached a decision to form a Committee called the Committee of five that will work on a draft or bill for oil and gas agreed by large parties as a basis for first reading legislative actions which then will draft amendments as requested by the House of representatives.

He alatroshi to: the importance of law lies in the two first professional technician where the oil and gas Act will regulate the vital sector statute is important in Iraq as known, about 95% of Iraq’s revenue from oil, according to the report of the Finance Committee and the oil sector needs a clear and explicit Act employs the powers of each of the parties as provided for in the Constitution must translate this article to constitutional law serves the ground to draw oil policy that serve citizen and country, notingThe second important aspect: the adoption of the law on oil and gas will be the largest contract in Iraq after 2003 because of the biggest problems of distribution and wealth management in Iraq, specifically oil wealth if we succeed in resolving this node will be way easier to solve other problems.

Said: the Kurdistan Alliance will make every effort to bring the Bill in line with the Constitution spirit and in form and we are serious about this issue and we believe by reading the political situation that everyone in dealing with serious law absolutely for its legislation, adding: that the law is a 50 articles by draft the dispute sites will be limited in certain cases but substantial and fundamental issues but many participants.

And Deputy from the Kurdistan Alliance: there are four or three projects probably will be added to another project to the Committee on oil and energy, the four projects represent the views of the party I represent the Government’s view and understanding of the constitutional articles 111 and 112 and other constitutional materials and power must be a priority for the Federal Government except some formal secondary authorities other projects included by some political parties that the system in a federal Iraq based on the levels of Government and to the authority of the Federal and territorial Governments and local governments in the provinces, must not exceed Stressing the necessity of the distribution of powers and competences between these levels under one law.

http://bit.ly/TRE2il


Iraq’s willingness to negotiate to end the dispute over the oil law

BAGHDAD – Reuters
Said Iraqi Deputy Prime Minister, Rose Nuri Shaways, the Kurdistan semi-autonomous ready to resume talks with Baghdad to end their political differences, particularly on the oil law deferred for a long time, which would give regional authorities more influence in the management of energy resources.

indicate positive tone for Shaways, a Kurd, to the central government in Baghdad and the Kurdistan region may Tkonan are poised to resolve the dispute over oil, land and power-sharing, a conflict that threatens the federation is stable in Iraq.

said Shaways Reuters Kurdistan believe that it is possible to resolve the dispute over the oil through an amended draft for oil and gas law dating back to 2007, a draft of which has received the consent of all parties in the above.

http://bit.ly/Q7AaWg


Today .. Meeting for the selection of draft oil law

07/29/2012

Meet in the House of Representatives today to the Commission on oil and energy and the Legal Committee for the selection of a hydrocarbon law that is consistent with the Constitution. Announced that the “morning” Member of the Oil and Energy Rep. Susan Saad, indicating that the Commission on oil and energy accounted for (lobby) to put pressure on the political blocs in order to determine its position of the law.

It is noted that there are in the Commission three copies of the oil law, the first version drafted by the former, while the second version introduced in 2007 and wants the Kurdistan Alliance, which, while emphasizes the central government need to adopt a version approved by the Council of Ministers recently.

She Saad that the law which will be submitted it will take place during the second reading amendments, as it will include a lot of important topics, similar to other laws that prepared and presented for discussion .. And thus will be the House of Representatives-Faisal to vote on any proposal. “

She explained that there are” two versions presented by the government and the proposed Third, in advance of some members of the House of Representatives “, expressing concern about the delay in approving this law,” because the country needs him after that the reason behind a lot of problems between Center and the Kurdistan region, “especially that Article 112 is clear, so devolve and warp in line with the interests and approval of the law will determine the central subject and end the controversy. Article (112) of the Constitution as follows:”

First: The federal government will administer oil and gas extracted from existing fields with the governments of producing regions and provinces, that the revenues will be distributed in a fair proportion to the population distribution across the country, with a quota for a specified period for affected regions, which deprived them unfairly by the former regime, which were damaged after that, to ensure balanced development in different parts of the country, and shall be regulated by law.

Second: The federal government and governments of the regions and producing provinces together will draw up strategic policies to develop oil and gas wealth, so as to achieve the highest benefit to the Iraqi people, relying most modern techniques of market principles and encouraging investment. “

http://bit.ly/NP8C65


Oil and Gas Commission: The oil and gas law effects the Constitution and is the cause of political crises

FRIDAY, JUNE 29, 2012 09:09
Exposed to oil and gas committee in the House of Representatives, Friday, its claim to speed up the approval of oil and gas law, the law usually Balakhtr after the Iraqi constitution.

A member of the Commission on oil and gas parliamentary Mchkta denominator for ” Twilight News “, the meeting of the Commission on oil and gas, the latter was the insistence on the claim to speed up passage of the law of oil and gas.”

He added that “there is no law of oil and gas led to the emergence of the recent political crises.”

Mchkta promised oil and gas law “the most dangerous after the Iraqi Constitution, because it regulates the largest sector of the national revenue, which constitute 95 percent of the revenue budget.”

And that “the Kurdistan Region has a gripping an earlier agreement between the government and the province if it does not pass oil law in 05.13.2007 are entitled to both parties to conclude oil contracts.”

“The draft law of 2007 was the only consensus that the National Alliance withdrew from the meeting for the reading of the President of the Council in the past did not stop the House of Representatives Bahdha first reading of the law.”

The Commission on oil and energy parliamentary mentioned, earlier, she would move to the two draft law of oil and gas to be presented to the House of Representatives for discussion after the legislative recess.

The Iraqi cabinet approved a draft law of oil and gas in 2007 but faced objections Cordillera, where is the Government of the Territory that the draft law, however, focus the powers of the Federal Government in the management of oil wealth at the expense of the region and the provinces.

Since approval of the Iraqi Constitution, such as oil and gas law the most outstanding issues between Baghdad and Erbil, which is no less important for the leaders of the Kurds on Article 140 of the Constitution.

http://bit.ly/N1Xcu3


Oil Minister will call for speedy adoption of the petroleum law by the House of Ministers

Date: Thursday, 31-05-2012 02: 30 pm

Baghdad (newsletter) … Oil Minister Abdel Karim’s House would, to expedite the adoption of the law of oil and gas, because of its importance in extractive industry of the country.

He would (for the news agency news) on Thursday: the Ministry drafted a revised legal for oil and gas and submitted to Cabinet for approval by the Board, and then come to the House Energy Committee specifically for oil and vote on them.

He added: we must speed up the adoption of the law of oil and gas by the House, because of its great importance in the development of the extractive industry, both oil and gas in the country.

http://bit.ly/L8ZPt4

______________________________________________________________________________________________________________________________________________________

This document is also a PDF attached at the bottom of this page below available for download!

Brief Review of the Federal Oil and Gas Law Proposed by the Ministry of Oil.

Ahmed Mousa Jiyad,

Iraq/ Development Consultancy and Research,

Norway.

Mou-jiya@online.no

29 August 2011

 

Introduction

The Legal Department of the Ministry of Oil-MoO finalized on 27 July 2011 the text of its proposed Federal Oil and Gas Law- FOGL (hereinafter referred to as FOGL/MoO). According to the normal procedure the ministry passes the proposed law to the Cabinet for approval, and the latter passes the final text to the Parliament for promulgation. The parliament tables the proposed law for debate according to an established parliamentary procedure, and when finalized and approved it becomes a law and effective once it is published in the Official Gazette- Alwaqaie Aliraqia. 

 

On Sunday 28 August the Council of Ministers approved the draft law considering it the only text that represent the council view, and all other previous version are invalid. Also the council decided to send the proposed draft to the parliament version and request to table the proposed law for discussion in the parliament.

At this stage it is not fully clear whether the Cabinet had approved the proposed text as is or amended it, and if amended what are these amendments. And since the Parliament is in the Eid Ramadan recess, it is expected that the matter will be taken when the House reconvene on 6 September. 

 

It is worth recalling that on 17 August the parliament began the first reading of another draft law presented by Oil and Energy Committee in the parliament (hereinafter referred to as FOGL/OEC), but was suspended and deferred to another date after walkout and objections from within the House itself. The first reading of this FOGL/OEC suppose to resume when the House reconvene on 6 September.

 

I have in an earlier contribution addressed and assessed FOGL/OEC arriving at general conclusion that this law could have very damaging consequences on the upstream petroleum sector, on Iraq’s interests and on the political stability and development in the country. My assessment was sent to many members in the government, to all committees in the parliament, to large number of individuals and network inside Iraq and posted on many professional and business websites. 

 

Few days ago I received copy of the Ministry’s version of the law FOGL/MoO, which this intervention is all about. I assume the Cabinet had approved the draft in its substance and main principles and provisions.  Part one of this review provides the main conclusions, while part two deals with the details on article-by-article base.

 

Part one: Main Conclusions

At the outsets and after reviewing this new draft I came with the following preliminary conclusions: 

1-      The new version FOGL/MoO is much better, more coherent and well balanced than FOGL/OEC from form, substantive and operational perspectives. It is also more inclusive and participatory as it grants membership in FOGC for more producing provinces. Moreover, the Iraqi state companies, which are the core of mid and upstream petroleum sector, would be presented in FOGC.

 

2-      FOGL/MoO has minor improvements compared with the previous drafts especially the one considered by majlis Shura al dawla- the State Consultative Council. Moreover, it has taken into account some of the developments that have taken place since 2007, especially those related to the three bid rounds.

 

3-      Nevertheless, FOGL/MoO still has many serious flaws, ambiguities, overlapping of authorities, imbalances and lack of coherence, among many others. It is important therefore that this FOGL/MoO address some vital imbalances and important issues to insure coherence, functionality and effectiveness of the proposed legislation and attract national support for it. These are elaborated in details in the second part of this review, but summarized as follows:

-          Balance between the roles of legislative and executive branches of government pertaining to mid and upstream petroleum sub-sectors.

-          Balance and harmonization between the federal, regional and provincial authorities.

-          Balance between representation and efficiency consideration pertaining to FOGC.

-          All contracts concluded before the enactment of this law should be assessed according to the same set of criteria, done by the same body (FOGC), approved by the Council of Ministers and legalized by the federal parliament. 

-          The law ought to prohibit Production Sharing Contracts in any phase of exploration, or development and production activities, in compliance with constitutional basic principles of collective ownership of petroleum resources and the best interests of the Iraqi people. 

-          Provisions relating to INOC should be made very clear accompanied with full list of all fields (producing, under-development and discovered but not yet developed) and known exploration blocks earmarked for INOC.

And since the most prized oil and gads fields have already been contracted with IOCs, the remaining fields (developed, underdevelopment or discovered but not developed) should, as a rule, remain within and develop through national direct efforts and, as exception, develop through service contracts.   

 

4-      This oil and gas law (FOGL-MoO) cannot be the legal source to promulgate another law, e.g., revenue sharing law, since the constitution is the legal source and reference for the latter law according to articles 106 and 112 of the constitution.

It is therefore very advisable to separate the two laws, as there is no logical or legal justification to address revenue sharing matters within this law in such un-substantive way.

 

5-      Provisions pertaining to the jurisdiction of this law could be interpreted to exclude some important contracts (such as that for Basra Gas Company-BGC with Shell and Mitsubishi) from this FOGL.  Yet other law(s), which such contracts may fall under (such as Private Company Law nr. 21 of 1997 as the case for BGC) has NO jurisdiction over foreign investment in midstream and upstream petroleum sub-sectors.

 

6-      Considering the strong objections that surfaced so far against FOGL/OEC, it is advisable that the parliament suspends the first reading of this FOGL/OEC when resuming its session on 6 Sept after the Eid holiday to avoid further disarray, acrimonious atmosphere and condemnation that this unfortunate and ill-advised draft by Oil and Energy Committee had created.

 

7-      On its side the government may make the draft of its final version of the law available for public debate by posting it on the websites of the Council of Ministers and the Ministry of Oil.

 

8-      Having two rather different versions of the law one was proposed by the executive branch (FOGL/MoO) while the other was allegedly proposed by sub-political groups within the legislative branch and presented by OEC (FOGL/OEC) would make the legal framework governing the petroleum upstream sub-sector more confusing and uncertain. 

 

A condition such as this is not conducive to ensure the best interest of the Iraqi people that is enshrined in the constitution, or to furnish legal predictability and certainty that foreign development partners and IOCs are usually, or theoretically, concerned with. 

 

A resolution of this matter is of profound importance to finally agree on national functional legal framework governing the oil and gas resources of the country, and any further delay opens the door for suspicion, accusation and all forms of conspiracy theory interpretations.  

 

9-      In the mean time the parliament could enforce moratorium preventing any authority from concluding contracts pertaining to upstream petroleum as from a specific cutoff date (for example 15 September 2011) until and unless the FOGL is promulgated.

 

The parliament could also pass a motion requesting the Federal and Regional Governments to submit authentic copies of all already concluded contracts, for the parliament to review, debate, assess and legalese by specific laws, if proven they were conducted and are in compliance with basic principles of the Constitution.  

 

Part Two: Articles Review

The proposed FOGL/MoO in my humble views still has many serious flaws that have to be addressed. The followings are few observations on the text of this FOGL/MoO made in chronological order of its articles.

 

Article 1: Definitions

1-      The law assumes INOC be established after the enactment of FOGL. The implication is that the House has three alternative options to consider in addressing this organic linkage between INOC law and FOGL:

I-                   Suspend the debate on INOC law (currently under first reading phase in the House) until FOGL is finalized, and INOC law redrafted accordingly.

II-                Remove all provisions pertaining to INOC in FOGL if the former is enacted before the latter.

III-             Debate the two laws in tandem and promulgate them concurrently.   

 

2-      The threshold for producing province is set at 100,000 bd (lower than that suggested by FOGC-OEC.) The implication is that the number of petroleum producing provinces presented in the Federal Oil and Gas Council-FOGC would be higher under FOGL/MoO than under FOGC-OEC.  

 

Article 2: Objectives

1-      One of the objectives of FOGL/MoO is to reach “maximum level of production”. This objective is doubtful as it could deliver negative results on prices and depletion rates. Moreover, production should be geared to national development requirements within sustainable development perspectives. Therefore replacing the word “maximum” with “economically optimal” is more appropriate.  

 

Article 5: FOGC Membership

1-      Adding the “related” Deputy Prime Minister (currently Dr. Shahristani) to FOGC membership would strengthen the role of the federal government in this council.  

2-      The representatives of the “producing provinces” should have proven record of experience in petroleum industry. The representative is nominated by the related province but has to be approved by the Council of Ministers.

3-      The three “experts” members should be Iraqis, to avoid any interpretation that permits foreigner to hold membership.

4-      It is highly advisable that FOGC has permanent General Secretariat with well-qualified and experienced Iraqi staff in fields related to the nature of FOGC functions, responsibilities and role. Moreover, it could be appropriate that either the Minister of Oil or the Head of INOC acts as the General Secretary of FOGC in addition to the membership in the council.

5-      Having permanent general secretariat is essential to ensure continuity since all members of FOGC (except the three experts) are there by virtue of their official positions not professional qualities, and thus the possibility of their turnover could be high and frequent.

6-      Unlike FOGC-OEC, the core of the upstream and midstream petroleum sub-sectors is well represented in FOGC by INOC, SOMO and other related State companies according to this FOGL-MoO.

7-      Considering the rather large number of FOGC members, their nature of representation, and the magnitude and strategic significance of the functions and role of FOGC it is important to insure balance between representation and efficiency considerations so that FOGC conduct its functions effectively.        

 

Article 7: The role of the Parliament.

1-      The proposed law circumvents the parliament from having a role in all matters related to upstream and midstream petroleum sub-sectors, and thus preventing the parliament from exercising its constitutional functions as the only lawful representatives of all the Iraqi people according to articles 5 and 49 of the constitution.

Moreover, the constitution entrusts and indeed obligates the federal parliament to be the guardian to “safeguard the interests of its [Iraq] people” and “ensure the safety of its., wealth [oil and gas ]”, according to Article 50. 

In the mean time FOGL entrusted FOGC with too much power and authority pertaining to oil and gas wealth, while all members of FOGC except the Prime Minister could be non-elected but appointed officials. 

Obviously, there is unacceptable imbalance in the legitimacy of functions between the parliament and FOGC, and such imbalance has to be corrected.  

2-      To ensure the constitutional balance between the executive and legislative branch of authority pertaining to the scope of this law this article has to be amended. The following suggestion could be considered as addition to this article, “The Parliament discuss, approve and legislate laws pertaining to all Service Contracts resulting from licensing bids pertaining to upstream petroleum development.”  

 

Article 9: Functions of FOGC

1-      FOGC cannot decide the “Petroleum industry policies” since it does not have the legal mandate and the technical capacity or institutional representation to do so for three reasons:

I-                   Decisions on such policies are among the functions of Council of Minister-CoM in the area of development plans.

II-                The term “Petroleum industry” covers also all downstream sub-sectors, some of which such as gas industries, petrochemicals, refining industry and others are outside the scope of this law, as stipulated in Article 50.

III-             These vital sub-sector downstream companies are not represented in FOGC.

 

2-      FOGC should not decide the “national petroleum production level” since this is the function of CoM. However, FOGC can suggest or recommend the suitable national production level and the modalities of assessing the equitable contribution of each producing contracting area.

 

3-      The draft law gives FOGC members new authority to suggest laws. But FOGC members cannot have the authority to suggest laws, as this function is confined to the Parliament and the Government. Thus this right might be contested on grounds of unconstitutionality. 

 

Article 10: the Bureau of Independent Advisors-BIAs

1-      FOGC deals with matters mostly of sovereign nature that has long-term implications for the petroleum midstream and upstream sub-sectors and the Iraqi economy at large. These matters should not be left in the hands of “one year” employed advisors.

2-      This law does not specify that the advisors should be Iraqis. Thus it is vital to make such specification to avoid any possibility of employing foreign advisors in this council. (The possibility of employing foreign advisors exists under FOGL/OEC and in earlier versions of FOGL since 2007) 

3-      The proposed law (as discussed later) gives too much power and authority to BIA. Thus, they would in fact be the effective decisions makers within FOGC despite their temporary and short-term employment.

4-      The temporary term of employment in comparison with the magnitude of their function and influence would make the advisors unnecessarily susceptive to corruption that could very well undermine and compromise the Iraqi national interests. 

5-      It could be more feasible to delete this article, and substitute the BIA by strengthening the technical capacities of the General Secretariat of FOGC as suggested above in article 5.

 

Article 11: the Role of the Ministry of Oil-MoO

1-      Sub-para (12) needs redrafting to fit well with INOC functions.

 

Article 13: INOC

1-      The term “Operator and authorized” referred to in Sub-para (first) needs careful drafting and clarifications.

2-       The terms “Current production fields” and  “the undeveloped fields close to it” needs to be specified and listed by names if known today. This to avoid the already known ambiguity that lead to different interpretations. 

3-      Fields referred to in Sub-para (second, b) needs specific data with names if known today, and without INOC needs to have future authorization from FOGC.

4-      Sub-para (second, c) contradicts sub-para (second, a) and thus has to be revised. Also the condition of “competitiveness” with powerful IOCs would definitely work against INOC interests. This has to be removed and the entire sub-para drafted properly.

5-      The term “reasonable profit” referred to in Sub-para (third) is vague and needs careful method to assess it or delete it as it should be one of INOC prerogatives in managing its own business operations.

6-      Nothing mentioned regarding selling gas to SOMO, since Sub-para (third) refers to “crude oil” only.

7-      Sub-para (third) refers to “Service Contracts” with regards to “field development”. These Service Contracts should also apply to “exploration” contracts with IOCs.

8-       Generally, this Article has to be coordinated with the INOC Law to ensure harmony between the two laws. (As discussed in Article 1 above)

 

Article 14: the Regional Commission

1-      KRG is represented in FOGC, thus there is no justification for the Regional Commission to attend also. Moreover, Regional Commission is not member in FOGC.

 

Article 15: Licensing

1-      Sub-para (first) mentions two contracts: Exploration and Production Contract-EPC, and Development and Production Contract-DPC. The EPC should be avoided since it is too restrictive and exclude the possibility of having “exploration Contract” only. Moreover, EPC implies the phase of “Development” though it is not mentioned.

2-      Sub-para (first) mentions the term “the commission” but this is not defined in Article 1. What is mentioned though is “The specialized commission”. Thus correction is needed if “the commission” means “the specialized commission”.   

 

Article16: The Contents of the Model Contract

1-      The article does not specify in a very clear language that such contracts are “Service Contracts” similar to those mentioned in Article 13.

2-      Some components might indicate to the possibility of Production Sharing Contracts- PCSs such as “suitable return on investment”. Components in other articles, 41 and 43 for example, could also indicate to the possibility of PSCs.  

3-      It is preferable therefore to make it absolutely clear that Production Sharing Contracts in upstream development sub-sector is prohibited under this law.  Such proposition is founded on Article 111 of the constitution and Article 2 (first) of this law. 

 

Article 18:

1-      There are no compelling reasons to justify this complete dependence on BIAs?

2-      If a contract that is seriously deviating from the model contract then it should be rejected on that premise. Therefore, there is no reason to vote on such contract within FOGC.

 

Article 19:

1-      Sub-para (first) is Ok but this has to be coordinated with new draft for Article 13 as suggested above.

2-      Sub-para (second) needs also proper redrafting for coherence and consistency purposes.

3-      The term “Iraqi specialized company” mentioned in Sub-para (third) needs, by necessity, the addition of “State” to avoid miss-interpretation for “private”.

 

Article 21:

1- It is not practical or correct to deal with or treat INOC in the same way the law deals with other IOCs regarding taking over the related fields at the end of the Contract’ duration. This is because it is expected that INOC itself would receive all petroleum fields from the IOCs when their contracts had expired.

 

Article 22:

1-      A clear distinction between the “Specialized Commission” and the State Contracting Party should be made since this article implies obligations for both.

2-      Sub-para (eight) needs clarification regarding oil marketing.

 

Article 29: the Non-associated Gas Fields 

1-      The condition of having “gas purchase agreement” as one requirement for the field development could confine such development to export only. Flexibility is required to cover the domestic needs for gas in various uses in energy and non-energy sectors. Moreover, this condition would logically leads to “Exploration, development and production” contracts, which was discussed in Article 15 above.

 

Articles 30 and 31: Pipelines

1-      While article 30 asserts that the federal government owns the “major pipelines”, article 31 says that, “INOC or any other specialized Iraqi Public Company established for this purpose” would own these major pipelines. Though this is minor contradiction since INOC and the other company are State companies, nevertheless and legally speaking there is and should be clear distinction between the two, and thus redrafting is needed.

 

Articles 33 and 34 : Field Development Plan

1-      The two articles assert the need for optimal field development plan that should be formulated on assessing alternative options to maximize petroleum extraction at lowest costs, and by using advanced methods.

2-      It could be useful to mention, in this law, the development activities should comply with Hydrocarbon Wealth Preservation Law nr. 84 of 1985 and all related directives and instruction.               

 

Article 40: Petroleum Revenues

This article does not fit in this law, since according to the constitution there would be a specific law for revenue sharing. This oil and gas law cannot be the legal source to promulgate another law, e.g., revenue sharing law, since the constitution is the legal source and reference for the latter law according to articles 106 and 112 of the constitution.

Therefore, it is better delete this article 40. 

 

Article 41:

2-      The term “share” pertaining to the foreign investor in sub-para (3rd) could imply PSC.

 

Article 43:

1-      The terms “royalty payment” and “production bonus” in sub-para  (1st, a) could imply PSC.

2-      The term “Financially important contracts” has to be clearly defined with minimum possibilities of exemptions.

 

Article 45:

Dispute settlement should be related to the concluded contract NOT the interpretation of this law, since “the law is sovereign” as Article 5 of the constitution, asserts.

 

Article 47: Legalizing already concluded contracts

1-      This article creates two different systems to examine the already concluded contracts one for MoO and the other for KRG. Moreover, the BIAs exercises sovereign decisions regarding KRG contracts and this should not be accepted, especially if the majority of the advisors are foreigners.

2-      The wording regarding “compliance with this law” is not identical in the sub-paragraphs.

3-      All already concluded contracts should be subject to similar criteria of assessment, that is done by the same body (FOGC) and finally approved by the federal Parliament and enacted by laws.

 

Article 50: Jurisdiction of the this law

1-      This law does not apply to “gas manufacturing”, according to this article. But the term “manufacturing” could cover many activities some of which falls within midstream and upstream petroleum sub-sectors that are covered by this law.

2-      This article could be interpreted to exclude some important contracts (such as that for Basra Gas Company-BGC with Shell and Mitsubishi) from the jurisdiction of FOGL.  Yet other law(s), which such contracts may fall under (such as Private Company Law nr. 21 of 1997 as the case for BGC) has NO jurisdiction over foreign investment in midstream and upstream petroleum sub-sectors.

3-      Such “legal vacuum” for these important contracts (BGC as example) could compromise Iraqi interests.

4-      It is advisable, therefore, to redraft this article to include important contracts (such as that for Basra Gas Company) under the Jurisdiction of this FOGL. 

 

Ċ
Mark Aldrich,
Jul 26, 2016, 1:13 AM
Ċ
Mark Aldrich,
Jul 26, 2016, 1:13 AM
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