Iraq/Kurdistan Region ‘may reach oil law agreement soon’

Image source: Xian Studio.Iraq’s federal government in Baghdad and the semi-autonomous Kurdistan Region of Iraq could soon reach an agreement on who should control oil resources, Iraq's oil minister has said

Disagreements between the two sides have prevented an agreement on a draft federal oil and gas law for more than five years.

The Iraqi government currently recognises very few deals signed between the Kurds and foreign companies.

"The parliament has tasked the federal oil minister and minister of natural resources in Kurdistan to reach a version of the law acceptable to all parties," federal oil minister, Abdul Kareem Luaiby, was quoted as saying by Dow Jones.

"A new amended version of the law is expected shortly. It depends on discussions.”

Luaiby and Kurdish minister of natural resources, Ashti Hawrami, met recently in Baghdad to try to agree a version of the law that would be acceptable to both sides.

While the Iraqi government maintains that the contracts signed with the Kurdistan government are illegal, oil companies have overlooked these concerns.

Meanwhile, the Iraqi finance ministry has begun the payment of US$547mn to the Kurdistan Regional Government (KRG) to pay foreign contractors in the oil industry.

The move forms part of an agreement reached recently between the two sides.

The agreement comes after the KRG suspended crude oil exports of nearly 100,000 bpd in April, citing a US$1.5bn backlog owed by Baghdad.

It restarted them in early August but said flows would be halted once again if no payments were forthcoming by August 31. The KRG later extended the deadline to September 15.

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