Iraq's Federal Oil Ministry stops Kurdistan oil exports amid disagreements with foreign firms
Date
3/25/2024 7:21:18 AM
(MENAFN) The Iraqi Federal Ministry of Oil has declared the suspension of oil exports from the Kurdistan region, citing various reasons including the reluctance of foreign companies operating within the region to officially transfer their production to the government for export, as stated in a ministry announcement. The Ministry has indicated the possibility of a swift resumption of exports if these companies comply with regulations by delivering production from the region's fields in accordance with the law.
The origins of this crisis trace back to February 2022, when the Federal Court of Iraq deemed the oil and gas law in the Kurdistan region unconstitutional, asserting the Ministry of Oil's sole authority over all oil operations in the country. This ruling set the stage for a contentious dispute between the Kurdistan Regional Government and the federal authorities regarding jurisdiction and control over oil resources.
In June 2022, Schlumberger, an American oilfield services company, publicly announced the suspension of its activities in the Kurdistan region. This decision followed a similar move by Baker Hughes just days earlier. The withdrawal of these international companies was prompted by a directive from the Iraqi National Oil Company, urging compliance with the court's decision regarding oil production in the region.
The ongoing impasse underscores the complex dynamics at play within Iraq's oil industry, reflecting broader tensions between the Kurdistan Regional Government and the central authorities in Baghdad. As negotiations continue between the parties involved, the fate of oil exports from the Kurdistan region remains uncertain, with ramifications for both local stakeholders and the broader Iraqi economy.
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