Iraqi Kurds decry 'unjust pressure' from Baghdad in oil row

Iraq's autonomous Kurdistan region on Wednesday deplored "unjust pressure" from the federal government's oil ministry, days after the judiciary nullified oil contracts between the Kurds and foreign oil firms.

After the oil ministry filed a judicial complaint, a commercial court in the Iraqi capital on Monday invalidated contracts between the Kurdish region and four companies with production or exploration operations, according to a senior oil sector official in Baghdad and confirmed by a Kurdish government official.

Both sources spoke on condition of anonymity.

American companies are starting to comply with the Iraqi court ruling that deemed the Kurdistan Region's independent oil activities unconstitutional. You may remember Halliburton from its association with Dick Cheney during the Iraq war. https://t.co/7UMxhk1ngc via @AlMonitor

— Adam Lucente (@Adam_Lucente) July 6, 2022

The move comes as the Kurdish region and the federal government remain locked in a tug-of-war over the management of hydrocarbons.

Iraq's supreme court in February ordered Kurdistan to deliver the oil produced in its territories to the federal government. It also gave the latter the right to review all oil contracts, or even cancel them.

Since then, Baghdad has sought to enforce this judgement, opposed by Kurdistan, which wants to preserve the autonomy of its energy sector.

On Wednesday, the Kurdish government said in a statement it was "reviewing all the constitutional and legal procedures (available to) Kurdistan in the face of the unjust and unconstitutional pressure exerted by the oil ministry" in Baghdad.

"The court invalidated the contracts that did not conform with the decision of the federal supreme court," the anonymous oil sector official in Baghdad told AFP.

He said that the federal government has initiated judicial proceedings against a total of seven companies operating in Kurdistan, along with the autonomous region's natural resources minister and his predecessor.

Kurdistan says it is open to a negotiated solution to the spat.

Iraq's oil ministry has said that oil majors Schlumberger, Baker Hughes and Halliburton have committed not to initiate new projects in Kurdistan.

These companies are also working to "liquidate and close" existing contracts, according to the ministry.

Iraq, including the Kurdish region, sits on enormous oil reserves and revenues from the sector feed 90 percent of the federal government budget.