Iraqi federal supreme court deems Kurdish oil, gas law unconstitutional

The Federal Supreme Court issued a verdict on Tuesday, February 15, that the Kurdistan Regional Government’s (KRG) law on the independent sale of the Region’s oil and natural gas was against the Iraqi constitution.

The state-owned Iraqi News Agency (INA) said the court has asked the KRG to transfer the management of oil and gas sales to the federal government.

The KRG has been developing oil and gas resources independently of the federal government, and in 2007 enacted its own law that established the directives by which the region would administer these resources.

KRG crude is exported through a pipeline that runs from Iraq's Kirkuk region to the Turkish port of Ceyhan.

Tuesday's court decision stated that the Kurdish government in Erbil must hand over all crude from the KRG and neighboring areas to the federal government, represented by the oil ministry in Baghdad.

The ruling declared KRG oil contracts with oil companies, foreign parties and states invalid. This includes exploration, extraction, export and sale agreements, according to the document.

The ruling also stated that the oil ministry must be allowed to audit all agreements concluded by the KRG with oil and gas companies.

The KRG continues to export crude through Ceyhan, a shipping source told Reuters.

Buyers of KRG crude expect loadings to continue.

The KRG did not immediately respond to a request for comment.

Iraq’s federal government has long called for all oil exports in the country to go through it, having previously lashed out at Turkey in 2012 and 2014 for its role in refining and re-exporting oil produced in the Kurdistan Region.

“Today is a dark day in the history of the Kurdistan Region … The decision will have a significant impact on the oil project, extraction and the sale of oil and gas in the Kurdistan Region,” Iraq’s former deputy minister Fazil Nabi told Esta Media Network.

“The decision has a negative impact on the extraction and sale of oil and the contracts,” he added.

He, however, said it was not “the end of the world” and that there were still ways for the KRG to take with the federal government.

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