ERBIL, Kurdistan Region - The first round of talks between Baghdad and Erbil regarding the management of the Kurdistan Region’s oil and energy sector proceeded positively, according to comments from representatives of both sides following the meeting on Monday.
A high-ranking delegation representing the Kurdistan Regional Government (KRG), headed by Minister of State for Negotiation Affairs with the Federal Government Khalid Shwani, arrived in Baghdad on Monday to meet with Iraqi officials to “discuss the executive procedures” and to “agree on a new and a standard mechanism” for managing the Region’s oil.
“What we found today was great positivity from the Region and openness from the federal oil ministry in laying down the mechanisms that will melt the ice and cut down the problems in this direction,” Iraq’s Minister of Oil Ihsan Abdul-Jabbar Ismail said in a joint press conference following the meeting.
Abdul-Jabbar confirmed that the Ministry of Oil remains committed to the “basic principles” of the suggestions that were previously made to the KRG, which included sending all contracts and agreements made by the KRG with other countries and oil companies for the purpose of being reviewed and amended, as well as transferring the contracting party from the Region’s natural resources ministry to an oil company owned by the federal authority.
“We suggested naming it the KROC, Kurdistan [Region] Oil Company,” Abdul-Jabbar said after the meeting.
“The revenues of selling oil and gas from the Region shall be returned to an account opened in one of the international banks, owned by the Ministry of Finance. A payment security account, an escrow account, which would secure the payment of the Kurdish people’s earnings, in case the federal finance ministry is late in sending it,” the Iraqi oil minster added.
The first round of talks was also deemed constructive by Shwani, who spoke alongside Abdul-Jabbar. “I can say that the meeting was a sincere meeting, and we laid down a number of mechanisms that could be a future action plan to resolve the oil problem with all its joints in a drastic manner,” the KRG minister said.
According to the KRG’s annual report audited by Deloitte, over 152 million barrels of oil were exported throughout 2021 via the Kurdistan Export Pipeline. Sold at an average $59.459 per barrel, the Region’s oil made a revenue of nine billion dollars.
Shwani added that the meeting was “a good beginning for cooperation between the federal government and the KRG to settle the oil file in a way that would most benefit the Iraqi people,” and stressed that an oil and gas law would be the perfect solution for handling these disputes.
The Kurdish delegation is expected to discuss the findings of this meeting with the KRG before further rounds of talks are held.
RELATED: Federal court decision on Kurdish oil, gas industry ‘unconstitutional’: KRG
In mid-February, the Iraqi Federal Supreme Court ruled against the Kurdistan Region’s oil and gas law that regulates the oil sector in the Region, putting its industry in jeopardy. The ruling was widely condemned by Kurdish officials.
The KRG passed its oil and gas law in 2007, enabling it to administer and develop its own oil and gas resources.
The top court’s decision found the law to be “unconstitutional,” and therefore struck down the legal basis for the independence of the Kurdistan Region’s oil and gas sector. The decision came amid ongoing political tension and an ongoing government formation process in a country that has now failed to elect a president six months after elections in October.
Updated at 8:35 pm
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