Energy Law at Iraq
Energy Law in Iraq refers to the legal and regulatory framework governing the exploration, production, management, and export of the country’s energy resources—mainly oil and gas, which are central to Iraq's economy. Here's an overview:
1. Legal Framework
Iraqi Constitution (2005):
Article 111: States that oil and gas are owned by all the people of Iraq.
Article 112: Provides for the federal government, with the producing regions and governorates, to manage oil and gas extracted from present fields.
There's an ongoing legal and political dispute over the management and distribution of oil and gas revenues between the Federal Government (Baghdad) and the Kurdistan Regional Government (KRG).
Oil and Gas Law (Draft – Not Yet Passed):
Iraq has proposed several drafts of a Federal Oil and Gas Law, but none have been passed due to political disagreements, mainly between Baghdad and the KRG.
The law aims to clarify authority over contracts, revenue sharing, and exploration rights.
2. Key Institutions
Ministry of Oil (Baghdad): Oversees national oil policy, production, and exports.
Iraqi National Oil Company (INOC): Re-established in 2018 to manage state oil operations.
Kurdistan Ministry of Natural Resources (KRG): Manages oil resources independently in the Kurdistan Region.
3. Contractual Models
Technical Service Contracts (TSCs):
Used in federal Iraq.
Foreign companies are paid a fixed fee for producing oil, without ownership rights.
Production Sharing Contracts (PSCs):
Used by the Kurdistan Regional Government (KRG).
Companies share production profits and may have more control, which Baghdad opposes.
4. Recent Developments
Iraqi Supreme Court Ruling (2022):
Declared the Kurdish oil and gas law unconstitutional.
Ordered the KRG to hand over control of oil operations to the federal government, which the KRG has rejected.
Iraq-Turkey Pipeline Dispute:
The KRG exports oil through Turkey's Ceyhan port, which led to disputes and legal actions, including international arbitration.
5. Foreign Investment and Legal Challenges
Iraq remains a significant destination for international oil companies, but:
Legal uncertainty, especially regarding KRG contracts, poses risks.
Political instability, security concerns, and bureaucratic hurdles can affect operations.
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