BAGHDAD (AP) – Iraq’s oil minister said on Thursday the government would take steps to implement a recent court decision to cancel oil deals for the semi-autonomous northern Iraqi Kurdish field it had struck with international companies.
The minister, Ehsan Abdul-Jabbar Ismail, told The Associated Press that deals bypassing the Baghdad government are illegal and tantamount to oil smuggling.
His statements by a senior government official were the strongest since Iraq’s Supreme Court issued a landmark ruling against the Northern Territory’s independent oil field in February. Ismail said a total of 17 oil companies were being targeted for their dealings with the Iraqi Kurdish region.
Ismail said international companies that have signed the deals will initially receive a warning.
“We will give them a gentle message: ‘You are dealing in oil smuggling.’ If they’re a legitimate company, they’ll listen to us,” Ismail told the AP in an exclusive interview.
Kurdish officials, including the ruling Kurdistan Democratic Party in Erbil, dismissed the court’s decision as politicizing, claiming that the Supreme Court itself was unconstitutional.
The ruling came amid political unrest in Baghdad, where Iran-backed groups are pressuring Kurdish parties to join efforts to form a government after influential Shia cleric Muqtada al-Sadr, who won last year’s parliamentary elections. , withdrew from the political process as he could not produce enough MPs in the 329-seat House. The Kurdistan Democratic Party was affiliated with al-Sadr.
Iraq’s Kurdish region is also facing an increasing number of attacks targeting its energy infrastructure. Rocket and mortar fire repeatedly hit a gas field, while others last month targeted a pumping station and refineries.
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For years, Iraq’s Kurdish authorities took advantage of a constitutional loophole and managed to export crude oil from the federal government in Baghdad and maintain a modest level of financial independence. They have kept the details of their operations secret, including their production rates. The Iraq Oil Report, an oil industry publication, puts it at 440,000 barrels a day.
Now Baghdad officials are trying to shut that door, Ismail said.
The February court ruling rejected the Iraqi-Kurdish oil law as the legal basis used by the region with independent exports and contracts. Many questioned the timing of that decision, noting that it was years delayed. At that time, the Kurdistan Democratic Party and al-Sadr tried to form a government without Iran-backed parties.
Ismail acknowledged that the verdict came at a politically sensitive time, but denied that it was a political decision. Following the ruling, the Oil Ministry launched lawsuits against seven international companies, including Norway’s DNO, Canada’s Western Zagros and UK-listed Gulf Keystone.
This week, the Baghdad Commercial Court issued rulings voiding four of the seven contracts, the oil minister said, while the other three will be decided by the court at its July 17 session.
Ismail said the overall goal is to void a total of 17 contracts. He said some contracts were signed with UAE companies, others with Chinese and some with Russian companies.
Acting Iraqi Prime Minister Mustafa al-Kadhimi has so far stayed aloof from the latest developments, issuing a reconciliation statement about bad relations between Baghdad and Kurdish officials.
But Ismail said the ministry also plans to respond to the commercial court’s decision and give foreign companies the option to terminate their contracts by demanding that the Iraqi federal government exempt them from doing so — or file them with the Kurdish Ministry of Natural Resources request. Change to the Bund. The government’s Oil Ministry in Baghdad, he said.
He dismissed claims that it was technically impossible to transfer contracts from one authority to another, saying it was “just a matter of paperwork”. The Kurdish sector uses a production-sharing contract model, which contradicts the federal government’s preference for technical service contracts.
If companies don’t comply, Ismail said the government will use “law and banks” to enforce the decisions.
“We also have oil police, but we didn’t ask for them to be used,” he said.
Major oil service companies, including Baker Hughes, Halliburton and Schlumberger, have pledged to abide by the ministry’s blacklisting policy and said they will not seek new tenders from the Iraqi Kurdish authorities. International companies have been operating in the Kurdish region for years, with assurances from the Kurdish authorities that they face no legal risks.
Oil companies that contract with the Kurdish sector are actually operating in areas beyond the control of the federal government. It would be an unprecedented escalation to dispatch federal police to physically halt operations in Iraqi Kurdish territory.
7 commodity ETFs to hedge against inflation
Commodities are a broad category that includes agricultural products such as wheat, corn, and soybeans. This also includes oil and derivatives such as gasoline, natural gas and diesel fuel.
However, investments in commodities include precious metals such as gold and silver, and base metals such as copper and aluminum. And more recently, this area includes commodities like lithium, which are needed in many emerging sectors of our economy.
Commodity trading is often done by trading contracts on the futures market. And it’s not for the faint of heart. Prices are volatile and can change rapidly due to macroeconomic events.
However, at certain times, particularly during periods of high inflation, commodities outperform the broader market. A practical option for individual investors who want to profit from commodities is to invest in Exchange Traded Funds (ETFs). These funds allow investors to invest in this sector while reducing the risk associated with investing in a single commodity.
Here are seven ETFs you can buy to hedge against inflation.
See 7 commodity ETFs to hedge against inflation.