KRG Ministry of Natural Resources

26 June 2009

On 29-30 June the Federal Ministry of Oil plans to announce the results of its auction of six oil fields in Iraq. 

This auction is in violation of Iraq's Federal Constitution and, in the case of two of the fields, also in violation of the Kurdistan Region's Oil and Gas Law. 

For all producing fields in Iraq, Article 112 of the Constitution demands joint decision-making between federal authorities and the producing governorates and regions. As far as we can establish, this has not happened with any of the six fields. This is a clear violation of the Constitution. 

Two of the six fields, Kirkuk and Bai Hassan, are located in the disputed territories as defined by Article 140 of the Constitution. This fact is recognised by Iraq’s own Article 140 Commission and by the United Nations. 

Accordingly, any decision related to contracting for Kirkuk and Bai Hassan fields requires the direct involvement of the Kurdistan Regional Government (KRG) as a party to the dispute. Regrettably, the KRG has been involved in no such decision-making. This is a violation of the federal Constitution. 

The Kurdistan Region Parliament passed the Regional Oil and Gas Law in August 2007. In line with the Constitution, that Law mandates Regional authorities to contract for oil exploration within the Region and prohibits, in Article 19, oil activities in disputed territories that have not been approved by the KRG. It follows that oil companies who sign contracts in the disputed territories without the direct involvement of the KRG as a joint decision maker are also acting in violation of the Kurdistan Oil and Gas Law. 

Furthermore, as the KRG has explained, the proposed Oil Ministry contracts are not in the best interest of the Iraqi people, because they do not maximise economic returns as demanded by the Constitution. The Ministry of Oil, therefore, should reconsider its decision and the international oil companies should not undermine Iraq’s internal constitutional processes.