Iraq makes renewed effort to control Kurdistan oil revenues with contract switch

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Iraq has made a new attempt to control revenue from Kurdistan’s semi-autonomous region, asking oil and gas firms to sign new contracts with state-owned market SOMO instead of the Kurdistan Regional Government (KRG). has gone.

Oil Minister Ihsan Ismail said on May 7 that Iraq’s oil ministry would begin implementing a February federal court ruling that deemed the legal foundations of the Kurdistan region’s oil and gas sector unconstitutional.

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A letter seen by Reuters shows that the oil ministry has appointed international law firm Klee Gottlieb Stein & Hamilton to contact some oil and gas firms operating in the Kurdistan region, in order to “implement their operations in Iraqi Discussions can be started to bring it in line with law.”

The letter added that implementing the court’s ruling would require “a change in the contractual arrangement” for the companies. A source said other firms received a letter directly from the oil minister.

KRG has repeatedly overruled the federal court’s decision.

The letter, sent on May 8, is the first direct contact between the ministry and oil companies operating in the Kurdistan region. The move follows years of efforts by the federal government to bring KRG revenues under its control, including local court rulings and threats of international arbitration.

The implications of the latest move are not entirely clear as more than seven months after the election in Iraq, government formation is still underway.

An Iraqi oil ministry legal adviser, who spoke on condition of anonymity, told Reuters that the minister, including representatives from Iraq’s National Oil Company (INOC) and the Federal Board of Supreme Audit (FBSA), oil ministry Government committee will organize. A contractual review.

The advisor said the aim is to eventually sign the contract with the central government and not with KRG.

Foreign oil firms present in the Kurdistan region include General Energy, Chevron and Gulf Keystone and Klee Gottlieb declined to comment, while Iraq’s oil ministry and oil and gas firm DNO did not immediately respond to requests for comment.

An oil ministry official elaborated that the oil ministry is yet to receive a response from the companies concerned and may take further legal measures in case there is no response.

An oil firm representative told Reuters that foreign oil firms are unlikely to engage directly with Baghdad without coordinating with the KRG.

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