KRG Statement on Ruling of the Iraqi Federal Supreme Court

Erbil, Kurdistan Region, Iraq (GOV.KRD) – The Kurdistan Regional Government issued the following statement on Tuesday in response to the recent decision by the Iraqi Federal Supreme Court regarding Kurdistan Region’s oil and gas sector.

“The Kurdistan Regional Government believes in the Federal Iraqi Constitution of 2005. The Constitution recognizes the Kurdistan Region as a federal region with legislative, executive, and judiciary powers as per Article 117, and divides authority between the federal and regional bodies.

“Article 112 of the Constitution also stipulates that oil and gas is not within the exclusive authority of the federal government. This same article also preserves the right of the Kurdistan Region to produce and develop the region’s oil and gas.

“With regard for Article 112, and in the spirit of cooperation, the Kurdistan Region attempted to establish a law for oil and gas alongside the Iraqi government. A draft was prepared and signed by both sides in February 2007. In the protocol of this draft, both sides agreed that, if the draft does not pass in the Parliament within six months, both sides have the authority to develop their respective oil and gas sectors.

“The federal government unilaterally made significant changes to the draft when it removed all of the Kurdistan Region’s constitutional authorities. The Kurdistan Regional Parliament then, in compliance with its constitutional authorities, passed the Region’s oil and gas law, leading to renowned international oil companies investing massively in the sector, drilling for oil and developing the oil fields.

“The federal government’s unilateral decision to cut the Kurdistan Region’s share of the federal budget in February 2014 led to a major financial crisis in the Region. Consequentially, in March 2014, oil exports abroad commenced in an attempt to secure salaries and public services.

“The Kurdistan Region has continued negotiations to take mutual constitutional measures ever since and, in its latest attempt, both sides agreed, as part of the Federal Budget Law of 2021, that the Kurdistan Region has the right to produce and sell oil, with the federal government receiving 250,000 barrels of oil a day in return.

“Both sides also have a mutual understanding in drafting the federal oil and gas bill with regard to Article 112 of the Constitution. This further demonstrates the Kurdistan Region’s commitment to cooperation with the federal government, within the framework of the Constitution, in order to frame in oil and gas strategy across Iraq.

“While all sides should have considered the positive relations which exist between the Kurdistan Regional Government and the federal government, on Tuesday, the Iraqi Federal Supreme Court made a ruling without any regards for the Constitution. This ruling drew precedent from the centralized laws of the former Ba’ath regime, which does not align with the principles of federalism set out in the Constitution.

“It was the duty of the federal authorities to terminate those centralized laws after 2005, including the Ministry of Oil Law No. 101 of 1976. Moreover, this decision from the Federal Supreme Court constitutes multiple violations of the law by combining two different lawsuits without any legal basis. As such, this decision will further complicate this matter and preclude resolution of the dispute.”

In light of the aforementioned facts, the Kurdistan Regional Government stresses:

1- This decision by the Federal Supreme Court is unjust, unconstitutional, and violates the rights and constitutional authorities of the Kurdistan Region. It is unacceptable and the Court must investigate further and consider the requests of the Kurdistan Region.

2- The Kurdistan Regional Government will not forfeit the rights of the Kurdistan Region as codified in the Iraqi Constitution, and will continue its attempts to reach a constitutional solution with the federal government on this matter. This decision was reached in spite of the Kurdistan Regional Government’s request that the case be adjourned to allow the opportunity for an agreement to be reached with the federal government.

3- The Kurdistan Regional Government will take all constitutional, legal, and judicial measures to protect and preserve all contracts made in the oil and gas sector.

Kurdistan Regional Government
February 15, 2022

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