Iraq's oil minister says KRG has not made official proposals on establishing oil firms

Shafaq News/ Iraq's Minister of Oil, Ihsan Abdul-Jabbar Ismail, said that the Kurdistan Regional Government (KRG) is yet to submit any proposals on establishing oil firms in the semi-autonomous region to the federal authorities.

"We have not received any formal notice from KRG on this issue so far," Ismail told Shafaq News Agency on Sunday, "we cannot make an official statement based on media reports."

"We will read their proposal as soon as we receive it to see: is it compatible with the law and constitution? the ruling of the Supreme Court? the powers of the federal authorities? Only then, we can take an official stance."

Amid an escalating dispute with the federal Iraqi government over the control of oil resources, the semi-autonomous region of Kurdistan is working to establish two companies that would produce and market oil, a spokesperson for the KRG told Reuters last week.

KRG wants to establish one company to work on oil exploration, KROC, and another—provisionally named KOMO—which is expected to market and export the crude oil pumped in the region of Kurdistan.

The KRG has recently discussed the idea of establishing those companies with representatives of the federal government of Iraq, the spokesperson told Reuters.

The region of Kurdistan and the federal government have been in a bitter dispute for months over who has the right to control the oil resources and revenues in the semi-autonomous Iraqi region.

The oil ministry in Baghdad has made fresh attempts to control revenue from the Kurdistan region, including summoning seven firms operating there to a commercial court on May 19. The firms were Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran and WesternZagros.

Earlier this month, Kurdistan rejected a ruling from Iraq’s federal supreme court to hand over control over oil production.

In February, the Supreme Court of the Federal Government of Iraq ruled that sales of oil and gas by Kurdistan, independent of the central government in Baghdad, are unconstitutional and that the Kurdistan Regional Government must hand over all oil production to the Federal Government of Iraq. The court also ruled that the Ministry of Oil has the right to "Follow up on the invalidity of oil contracts concluded by the Kurdistan Regional Government with foreign parties, countries and companies regarding oil exploration, extraction, export and sale."

In early June, dismissing the Supreme Court ruling, Kurdistan's judicial council said that "The actions of the Kurdistan Regional Government in relation to oil and gas operations are in accordance with the Iraqi constitution of 2005. The provisions of the oil and gas law issued by the parliament of the Kurdistan region in 2007 do not violate those of the Iraqi Constitution."