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By Adam Montana
Oil and gas laws: a crux of Erbil-Baghdad tension
By Omar Moradi yesterday at 11:14 Iraqi forces drive past an oil production plant as they head towards the city of Kirkuk on October 16, 2017. Photo: Ahmad al-Rubaye | AFP The lack of oil and gas federal legislation has been the root cause of problems between Erbil and Baghdad since the Iraqi constitution was approved in 2005. Now there is a government in Baghdad that has shown its desire to resolve these problems through dialogue, and the success of the new Kurdistan Regional Government (KRG) cabinet depends on whether the oil and gas issue is resolved with Baghdad.
According to the constitution, it is the joint responsibility of both the federal and regional government to develop oil and gas resources through a particular oil and gas legislation. But as of yet, no such legislation has been passed, causing disagreements between the two governments.
Iraq's parliament unsuccessfully tried to pass a law on oil and gas in 2007. Following that, Kurdish parliament passed its own oil and gas law that same year, allowing the KRG to handle and develop the region’s natural resources.
The Kurdistan Region parliament’s oil and gas law gave it complete power over the region’s natural resources, much like an independent and sovereign country. The conditions of the oil market along with the law helped foreign companies invest substantially in the oil and gas sectors in the Kurdistan Region.
Investments in Kurdistan Region’s oil and gas sectors reached its peak when oil prices were high pre-2014, surpassing $20 billion. But after oil prices fell in mid-2014, the Kurdistan Region and the rest of the world's oil investors faced a deficit.
This shock was especially big in the Kurdistan Region. The federal government in Baghdad cut Kurdistan Region’s share of the federal budget in 2014, after which a big financial crisis rocked the Kurdistan Region. The impact of the crisis is still seen in the Region's economy. The Kurdistan Regional Government (KRG) still owes money it borrowed during this time.
The KRG and federal government should resolve oil and budget problems in order for stability and certainty to return to the economy of the Kurdistan Region - otherwise a big opportunity will be missed.
The Iraqi constitution can help in this matter. According to Article 112 of the Iraqi constitution, the running of oilfields in Iraq is the responsibility of both federal and regional governments, or the provinces the oil lies in.
According to the oil and gas law of the Kurdistan Region, the KRG and its Ministry of Natural Resources are free to sign contracts with foreign companies that serve the interests of the Kurdistan Region. That is why the KRG signed nearly 50 contracts with oil companies after 2007 which are producing substantial amounts of oil and natural gas.
The KRG planned to produce a million barrels of oil per day, but couldn’t do so because of the Islamic State (ISIS) onslaught and falling oil prices after 2014. But because of its robust oil and gas legislation, it still has the ability to produce vast quantities of oil and gas in the coming years.
The Kurdistan Region’s oil and gas law shouldn’t be abandoned in negotiations between the KRG and federal government on the issue of oil sales and production. The oil and gas law of the Kurdistan Region allows for the setting up of a box for oil revenues. The law also considers the formation of some national companies for the exploration, production, and marketing of oil in the Kurdistan Region. The establishment of these national companies can reinvigorate the oil sector in the Kurdistan Region.
With regards to the sale of oil, the Kurdistan Region can give all or some of the oil it produces to the federal government via national companies and ask for its fair share in return. This will not reduce the Kurdistan Region’s control over its oil sector, as the KRG has its own oil and gas law, is running these sectors in its own way, and has established its own mechanism and infrastructure for the last 10 years.
Oil and gas disputes with Baghdad to be addressed once new KRG cabinet formed
Sangar Ali | 8 hours ago Share share
An oil field in Nasiriya, in southern Iraq. (Photo: Reuters/Atef Hassan) Kurdistan Iraq Erbil Baghdad Oil Gas A+AA- ERBIL (Kurdistan 24) – A delegatiom from the Kurdistan Regional Government (KRG) will visit Baghdad to discuss disputes over Iraqi oil once the new Kurdish government is formed, a member of parliament in the Iraqi capital said on Wednesday.
Oil and gas shares and distribution have been the subject of a long-standing dispute between the KRG and the federal government of Iraq since 2003.
Following the formation of the new Iraqi federal government in Oct. 2018, both Erbil and Baghdad agreed on the 2019 national budget bill, which requires the Iraqi government to deliver the salaries of KRG employees along with some financial compensation as the KRG hands over the export of 250,000 oil barrels per day (bpd) to the Iraqi oil marketing company – SOMO.
Since the beginning of this year, the Iraqi federal government headed by Prime Minister Adil Abdul-Mahdi has delivered the salaries of the KRG employees on a monthly basis, but the KRG is yet to deliver the prescribed amount of oil to Baghdad as indicated in the Iraqi national budget bill.
Over the past few weeks, many Iraqi lawmakers have complained in parliament about the delayed KRG oil transfers, questioning the silence of the Iraqi government in that regard.
On Tuesday, Abdul-Mahdi, for the first time, issued a warning to the KRG for failing to meet its commitment in the delivery of oil to Baghdad. The warning came after pressure from multiple factions in the Iraqi parliament.
A lawmaker for the largest Kurdish faction in the Iraqi Parliament says that once the new KRG cabinet is formed, which is expected to happen in June, an oil and gas delegation from the KRG will visit Baghdad to hold talks.
“Today [Wednesday], we, as a group of Kurdish lawmakers, met with Abdul-Mahdi for a short period to discuss the matter. We couldn’t discuss things in details, but agreed that it would be best for the KRG delegation to visit Baghdad and address the issue,” Aram Balatayi, a member of Iraq’s Oil and Gas Parliamentary Committee, and spokesperson for the Kurdistan Democratic Party (KDP) faction in Iraqi Parliament, was quoted as saying on the party’s official website.
“The Kurdistan Region has an obligation to hand over the oil to Baghdad,” he continued.
“For more than ten years, the Kurdistan Region put effort into and created policies for its oil sector, so it is not easy to now seamlessly hand over the industry to Baghdad. Either the Iraqi government should pay dues of oil companies in the region, or the Kurdistan Region has to sell its oil to pay off those dues. Kurdistan can’t just hand over the oil to Baghdad and Baghdad then refuse to pay the companies.”
Balatayi noted that both Erbil and Baghdad could reach an agreement on who would pay the dues and debts of those companies. If it is the KRG, then the Kurdistan Region “has to continue selling its oil,” but should Baghdad decide to absorb those financial obligations, “then this is another subject, and we will have our say at that moment.”
The Kurdish lawmaker also noted that Kurds do not have a representative in Iraq’s SOMO and are not sure if they would be given a seat at the table to represent their interests.
“There is still an ideology of centralizing power in Baghdad. We have issues with that, and a mechanism should be developed to deal with this,” he added.
Gulizar Rashid Sindi, the deputy head of the Kurdistan Region’s Energy and Natural Resource Parliamentary Committee, stated that both the Kurdistan Parliament and the new KRG cabinet should cooperate in this regard.
“The Kurdistan Region urges the resolution of the energy question through dialogue and the proper mechanisms,” Sindi told the official KDP website.
“The Kurdistan Region will not be bound by Baghdad’s request if it isn't in the interest of the people of Kurdistan.”https://www.kurdistan24.net/en/news/d227436b-1f58-4cc9-b560-4c8e64843239
By Adam Montana
I know, it's not Wednesday...
I mentioned recently that the "Weekly Updates" may be switching days - I expected
the news to start getting busy, and that is now official! I haven’t picked a specific day yet,
and I may not need to.
The weekly updates won't be necessary once we have an RV, and the stars are lining up very
nicely right now.
Fingers crossed on that one. I’ll explain why below, and you might want to strap in for this one!
First, the budget was submitted, signed, and looks like it will be passed, with a HUGE
keynote - a significantly acceptable portion of the budget going to the Kurds. This has
been a major point of contention between the parties over the years, in fact it’s possibly
the biggest point of disagreement and reason for delays in the budget approval process
in recent history.
You can read the budget as it is written and posted here, but it needs to be published in the
Gazette to be official. This may be happening yet this week, and if it does... that will be insanely
It's barely the first week of February!!! Last year the Budget was boycotted by the Kurds in March,
and they threatened to secede over the disputes.
THAT is how far we've come in a year!!!
If you’re not already squirming, let me tell you - this is awesome news. A happy GOI is a
GOI that we can get behind, because it’s one that is more likely to RV. And this is possibly
the happiest we’ve ever seen them!
That by itself may have been enough reason for me to send out a special email on most
weeks, but this week - THIS week - we have more.
Maybe MUCH more!
I’m trying to contain my excitement, and I’ve been doing a pretty good job of staying (mostly)
in my seat, but it’s getting more and more difficult.
We may have an HCL agreement shortly!
I’ve been on the verge of releasing this information for over a week, and I’ve only held off
because THIS is the kind of movement we need to see for an RV to happen, and I didn’t
want to release the news without a full confirmation.
As the news keeps coming out, this is going to start getting press in other places, so you
may as well hear it here.
If you’ve been following me for any time now, you know I’ve been on an “HCL-requirement”
kick for a couple years now. No HCL = no RV. I've harped on that for years... and now, after
a long ride, it's not just on the horizon - it's coming at us, lights flashing and horns blaring!
If you have NOT been with me for that long, let me introduce myself!
Hi, I’m Adam Montana. The possibility of a Dinar RV has been in the works for a while
now - over a decade, in fact.
I’ve been following it, and helping tens of thousands of people avoid bad info, for the entire time.
The summary on Iraqi Dinar is simple - back in 2003, the country of Iraq went through some
stuff and their currency plummeted in value. It was once worth over $3 per one Iraqi Dinar,
and now it’s worse than 1000 dinars to $1.
It was even worse, so much worse that those of us who got in early enough have already doubled our money.
But, and this is why most of us are here in the first place, it stands a fighting chance of going
back to it’s former value, or “ReValuing”, upwards to the tune of 100x where it is now or even more.
When that happens, those of us who have the current Iraqi Dinar (not the “old notes” with Saddam
Hussein’s face on them) will be able to exchange at that higher value, winning us an amazing profit.
It’s called a “windfall”, and it’s definitely a real thing.
Here’s where yours truly comes in. Throughout this whole venture, and before most of us ever heard
of the Iraqi Dinar, I’ve been fortunate enough to have contacts in places that matter to get the absolute
best return on the exchange. Because of the loyal group of members here at dinarvets who have committed
to work alongside my partners and I in this, we have formed the STRONGEST and BEST CONNECTED
group of dinar holders in the world… and this gives us EVEN MORE leverage. It's a snowball effect, and
it's a good place to be.
In short, we’re going to put more money in our pocket than the average Joe or Mary that simply goes
to the bank to cash in.
Not only that, but the years of networking and planning for this event have allowed my contacts and
I to put together the absolute best strategies for reducing tax liabilities, minimize risk, and even invest
after the fact to increase our returns.
The best part? There will be no “800 numbers” to call. The VIP group will NEVER part with their dinar as part
of their exchange. And if you decide to pay the measly amount of money it costs to join the VIP group,
you are ABSOLUTELY GUARANTEED to get a return on that expense when we cash in on the RV, or I’ll
refund every penny you spent on VIP.
Your time may be running out. Join VIP here, before it's too late.
Back to the Dinar, for the past couple years I’ve been saying that we need to see progress on the HCL
to see the RV. While other websites and “gurus” are talking about people already cashing in (fake news),
or having “secret intel” on the timing of this event… I’ve been telling people to remain calm.
That’s one of the reasons thousands of VIP members place their trust in my and the programs here,
because I don’t fluff this stuff up just to get people excited.
I do the opposite - if there’s nothing going on, I tell it like it is, no matter who gets mad at me for it.
(It happens! )
Well… the time that we have been waiting on may be over. There is news out right now that is more
encouraging regarding the HCL than ANYthing I have ever seen, and that means we’re almost there.
It means this may be your last chance to get in VIP. Your chance to get in VIP may be over before I
get this email sent out! And if the RV is announced, and you’re not in the VIP group - you’re on your
own. No benefits, no tax benefits, and good luck to you.
Now is probably the most URGENT time in this venture to get in VIP.
Join here: https://dinarvets.com/forums/index.php?/store/category/1-vip-membership-packages/
Remember, there’s a money back guarantee. You have nothing to lose and a LOT to gain.
See you in there!
- Adam Montana
P.S. In reading the above, I see that I didn't explain why the HCL is important. In a nutshell, it's important
to the Kurds so they get a fair share of oil revenue, and ties in very closely to their concerns on the budget.
Both of those issues are melting away, right in front of our eyes.
With these two things lining up at the same time, we have the most perfect situation to see an RV that I've
RIGHT NOW is an amazing time to be part of this situation!
Luigi found this article of Dinarian interests...
The commentators explain why Iraqis are more concerned about HCL than the rate change.
This should help clear up some of the confusion between the HCL & the RV.
The rate change will benefit those Iraqis out of country the most.
HCL will affect those in country with a pay check every month from oil revenue sales.
The rate change will only change the purchasing power of Iraqis in country.
Quick question or two. We had read that the citizens will start receiving oil revenue profits (HCL) September 5th. We have also seen many entities being paid, assuming at current rate. With that said, why are some thinking that if the rate does not change prior to Sept. 5th, it would cause anger from the citizens? Just trying to understand how that event is any more significant than previous?
I think I can touch the surface on this one they are a proud country, a rich country Iraq needs this ri for it’s psychological well being, Iraq’s are winners IMO
The citizens aren’t concerned with the rate change as it will not directly affect them. Their concern is with the value of their currency, ie it’s purchasing power which impacts their quality of life.
The income they will derive from the HCL is like a paycheck from the country’s sale of oil, and I suppose you could say that an increase in currency value or purchasing power is like a big fat pay raise.
These are the things they would get upset about if they don’t happen. We hope they happen together and our studies lend credence to that hope.
Will one happen before the other or will they happen together? Who knows. But again, the rate (exchange rate against USD) does not concern the citizens.
Think of it this way….if the USD’s exchange rate against the Euro tripled tomorrow you’d never know it nor would you care. But if inflation in the US rose to 1000% and milk cost you $36 a gallon and bread was $25 a loaf, you’d be upset if the promise to resolve it didn’t come through amidst a corrupt government being ousted and new monetary reforms being put into play.
This is a very simplified version of where Iraq is, IMO of course.
The citizen’s blessing comes from the oil paycheck via the HCL and the increase in value of their currency. OUR blessing comes from the increase in the exchange rate against the USD.
I hope that helps.
By Half Crazy Runner
Can anyone explain to me why must they pass the HCL law before there can be a revaluation of the dinar? What is the connection? It certainly doesn’t look like the GOI will ever agree on this or even bring it up for a vote. They keep pushing it off to the “next session” year after year... Is it at all possible that we can ever see an RV without the HCL law passing?