Kurdistan Regional Government Publishes Draft Federal Oil Law

9 March 2007 - The Kurdistan Regional Government (KRG) Spokesman today published an authorised English translation of the draft Federal Oil and Gas Law for Iraq. The original Arabic draft, also published by the KRG today, was prepared by the Oil and Energy Committee of the Iraq Council of Ministers on 15 February 2007. That draft was later approved by the Council. The drafts can be downloaded at the links below.

The English translation published today was prepared and authorised by the KRG. “These are the drafts recognised by the KRG”, said KRG Natural Resources Minister Dr. Ashti Hawrami.

“Old and inaccurate translations of this vital draft law have been circulating in the media in recent weeks. By publishing the original Arabic and the authoritative English translation together, we hope to make the picture clearer for potential investors in Iraq.” Dr. Hawrami represents the KRG on the Oil and Energy Committee.

Allocation of fields, model contracts, and Revenue Sharing Law outstanding

Pursuant to the Iraq Constitution and the draft law, the KRG will sign contracts for new fields in the Kurdistan Region. In a departure from the Iraq Constitution, the law establishes an independent advisory body, to be jointly appointed by the KRG and the Federal Government, to ensure that all contracts will meet certain minimum economic guidelines. The KRG has also voluntarily agreed that existing KRG petroleum contracts, which are explicitly validated by the Iraq Constitution, may also be reviewed by a panel of independent advisors.

The 15 February draft has not yet been introduced to the Iraq Council of Representatives (the Parliament), pending the completion of related matters. The Oil and Energy Committee will next prepare the four critical Annexes referred to in the draft Oil and Gas Law, which allocate the management of particular petroleum fields and exploration areas in Iraq to the KRG, the Iraq National Oil Company, and the Iraq Ministry of Oil. The Committee also needs to agree model petroleum contracts and guidelines for contractual terms, without which no investment in Iraq can begin. The Kurdistan Regional Government has agreed with the Federal Government that it will support the draft Federal Oil and Gas Law provided that the Annexes and other documents are concluded to the KRG's satisfaction, and if it is accompanied by an agreed Revenue Sharing Law for submission as a package to the Council of Representatives.

“The KRG has always been prepared to step down from its Constitutional rights and share petroleum management with the Federal Government”, said Minister Hawrami. “But if we do so, we must make sure that the Federal Government, like Kurdistan, is doing all it can to attract new investment to Iraq. It is vital that the Federal Government adopt the same market-friendly approach that the KRG has been using in its contracts.”

The draft law in English and Arabic is available here:

http://www.krg.org/articles/article_detail.asp?LangNr=12&LNNr=28&RNNr=70&ArticleNr=16644

For further information, please contact: spokesman@krg.org