Draw Media

Following the federal court's decision, the KRG is facing several options and scenarios, the most dangerous for the KRG to hand over the entire oil process. 

From the beginning of the Kurdistan Regional Government's decision for selling oil independently, the KRG was constantly in conflict with the Iraqi government, until the conflict in 2014 led to cutting the region's share of Iraq's public budget.

On January 15, 2022, a decision by the federal Supreme Court on the region's oil and gas sector, complicated the case much more. The implementation of the decision will be a major disadvantage for the Kurdistan Region.

First, the federal court's decision on the region's oil case

On January 15, 2022, the Iraqi Federal Supreme Court, in the presence of 9 members of the court and with a majority of 7 members and 2 votes against, decided on the invalidity of the region's oil and gas law and the unconstitutionality of oil sales by the KRG.

according to the court's decision;

1. The region's oil and gas law, No. 22, 2007, is unconstitutional and against the articles (110, 111, 112, 115, 121, and 130.)

2. The KRG will abide by handing over all the region's oil products to the Iraqi ministry of oil.

3. The right has been given to complainants to pursue the cancellation of oil contracts signed by the regional government with the outside parties, the states, and the companies.

4. The decision allows the Iraqi Ministry of Oil and the Financial Supervisory Board to review all oil contracts to scrutinize and determine the financial bonds that are on to the regional government. Then under the light of that, the region's share of the federal budget will be determined.

Second, the reasons behind the federal court's decision 

Regarding the federal court's decision on the region's oil case, different interpretations are made for the reasons behind the court's decision, particularly the time of the decision. Since two other complaints about the same issue have been filed before the court in 2012 and 2019, no decision has been made.

But choosing this moment arises a few questions, Among them, for 15 years, the Kurdistan Parliament has approved the regional oil and gas law, began extracting oil in 2009, and exporting oil since 2014. Why has this matter been brought before the federal court after all this time?

Therefore, we see that the political parties and officials have different interpretations and responses to the reasons behind the federal court's decision;

1. The federal supreme court's decision to take legal action, but has been postponed under the influence of some cases, said Ali al-Tamimi, a legal expert, in a statement to the al-Hara website. “Iraq is a federal country, not a confederation, and the Iraqi oil marketing company SOMO should be the only party to export oil.”

2. Another group of experts believes that the decision is more political rather than a legal issue, and they attribute the reason for the rapprochement of political forces such as the Kurdistan Democratic Party (KDP) and the Sadr Bloc, led by Muhammad al-Halbousi.

3. The third group says; Whether political or legal, the decision does not change much, but the fact is that after the referendum in the Kurdistan Region and the events of October 16, 2017, the region's position in Baghdad has continued to weaken, and Baghdad does not want the region's position to be strong.

4. Another group believes that; start exporting the region's gas; with the arrival of the new year (2022). The in efforts to industrialize the region's gas and export gas to Turkey and European countries similar to oil. Therefore, some observers attribute the federal court's decision to the KRG's move, which they consider to be against gas investment, not oil.

Third, the scenarios and options in front of the KRG regarding the federal court's decision

Although the decision is decisive and must be implemented, according to Article 94 of Iraq's permanent constitution, the court's decisions are decisive, stating that "all powers must abide by it", according to which the KRG will face several scenarios and options, including;

1. The implementation of the decision has to do with the rapprochement and nature of political relations and the relationship between the Kurdish and the Iraqi parties.

It can be worked out through political relations to keep the decision on the paper and not being implemented.

2. Launching diplomatic efforts in the Kurdistan Region and putting pressure on the central government to prevent the court's decision from being implemented.

3. The KRG would surrender oil fields bordering disputed areas outside the KRG's control (Mosul, Kirkuk, Diyala, and Salahaddin).

4. The Kurdistan Region work to pass the oil gas law in the Iraqi parliament and be able to implement the law that would allow the KRG to manage the region's oil, or jointly.

5. The last scenario, which is a weak scenario, is handing over the region's oil revenues to the central government and managing oil fields by the KRG (which is impossible for both sides).