Oil dispute puts Baghdad in front of "big" legal problems

Shafaq News / The American international legal firm Gibson Dunn, commenting on the problems between the Iraqi Ministry of Oil and oil companies operating in the Kurdistan region, announced that these companies can file cases in international courts, and demand tens of billions in compensation from the Iraqi government, if the latter insists on its efforts to cancel its contracts. in the Kurdistan region.

And the company said in a statement received (Baghdad today), that "taking into account the articles of the Iraqi constitution and the oil and gas law in the Kurdistan region, the file of oil companies operating in the Kurdistan region is strong, to the extent that allows them to file cases against the Iraqi government ."

Gibson Dunn stressed in her comment that "the Iraqi government will face major legal problems in light of this, and will have to pay billions of dollars in compensation ." The company added that "the Kurdistan region is part of Iraq in all circumstances, and Iraq must abide by international laws, especially since the Iraqi Oil Ministry has become a threat to the work environment of oil companies in the Kurdistan region ."

The company indicated that the Iraqi Oil Ministry's steps "contradict international laws and the decisions of the Organization of the Islamic Conference, of which Iraq is a member," stressing the need for "the Iraqi government's commitment to guaranteeing the rights of foreign investors."

The crisis over oil reached between the two governments; Federalism in Baghdad and the Kurdistan Region, advanced stages of complexity, with the Kurdish Judicial Council declaring the Federal Court unconstitutional. The Kurdish oil file has been managed since 2014 according to a formula of understandings concluded during the period of the government of Prime Minister Haider al-Abadi, obligating the region to hand over a percentage of its extracted oil or its revenues, or to deduct a percentage of the revenue values from the region’s share in the budget.

The disputes reached their climax after the Federal Court issued a decision on February 15, in which it considered the oil and gas law enacted in the regional parliament contrary to the constitution.

The court’s decision obliges the region to hand over its entire oil production to Baghdad, and to allow the concerned federal authorities to “review all its oil contracts,” but Erbil rejected the decision, so the Federal Oil Minister, Ihsan Abdul-Jabbar, announced on May 7 that the talks had stalled, and that practical measures had been taken to compel the companies.

Foreign women working in the region to cancel their contracts with Erbil and conclude them with Baghdad. And earlier, the Iraqi Oil Ministry issued a clarification regarding the position of the international oil companies operating in the Kurdistan region, northern Iraq, towards the decision of the Federal Court.

(Dinar recaps)