WASHINGTON, United States - The US State Department on Tuesday urged the Iraqi and Kurdish governments to determine a way that supports “existing and future” investments as looming disputes between Erbil and Baghdad could set back those interests.
“We have been and we encourage the parties to determine a way forward that supports existing and future investments” in Iraq and the Region, department Spokesperson Ned Price said in response to Rudaw’s question during his daily briefing on Tuesday.
"Any dispute between Baghdad and Erbil has the potential to set back those interests and the interest that we do share with the people of Iraq and Kurdish people as well,” Price added.
The remarks come a day after the US Senate Foreign Relations Committee called for the “highest level” US engagement in the Kurdistan Region.
“We urge you immediately to engage at a high-level with the KRG and the Iraqi government to safeguard the economic stability of the [Kurdistan Region of Iraq],” the lawmakers wrote in a letter directed to President Joe Biden’s administration.
The senate’s concerns follow the Iraqi oil ministry's announcement which said three US energy giants will stop tendering for projects in the Kurdistan Region in compliance with Iraq’s Supreme Court’s decision to outlaw the Region’s oil and gas law.
The oil ministry on July 4 said Schlumberger, Baker Hughes, and Halliburton are in the process of liquidating and exiting existing tenders and contracts in the Region.
The lawmakers said they were concerned about the oil ministry’s “selective application” of the court’s ruling to “certain” American companies.
The Iraqi Federal Supreme Court in February found the Kurdistan Region’s oil and gas law to be “unconstitutional,” therefore striking down the legal basis for the independence of the Region’s oil and gas sector. The Kurdistan Regional Government (KRG) responded to the decision, saying that the court’s ruling is not only “unconstitutional” but also “unjust.”
The letter also highlighted attacks on the Kurdistan Region’s energy sector which the US has invested millions of dollars in.
"The actions of the court and Iranian-sponsored attacks negatively impact the foreign investment climate and Iraq's ability to become independent from Iranian-sourced energy,” read the committee’s letters as the attacks are mostly blamed on Iranian-backed militias.
Three rockets struck Sulaimani’s key Khor Mor gas field in a matter of four days in June. Operated by UAE-based Dana Gas, the company temporarily suspended the work of one of its expansion projects following the assault.
The field has received a $250 million investment from US Development Finance Corporation (DFC), according to the senate’s statement, noting that the DFC has provided over $300 million “in loans to energy firms operating” in the Region.
When asked whether the US Department of State believes the playing field is leveled for American companies in Iraq, Price replied, “US companies have been in a position to win contracts worth billions of dollars, we have been engaging with our Iraqi partners with our Kurdish partners to make sure that playing field is leveled."
