The judicial council of Iraqi Kurdistan said the region's oil and gas law "remains in effect", rejecting a federal court ruling that the Kurdistan Regional Government (KRG) should hand over its oil production to Baghdad.
"The actions of the Kurdistan Regional Government in relation to oil and gas operations are in accordance with the Iraqi constitution of 2005," the judicial council said in a statement released on 4 June. "The provisions of the oil and gas law issued by the parliament of the Kurdistan region in 2007 do not violate those of the Iraqi constitution."
The Kurdistan region's 2007 oil and gas law enabled Kurdish authorities to administer and develop their own crude and natural gas resources. But in February this year, Iraq's supreme federal court ruled the law unconstitutional, declared oil contracts signed by the KRG with foreign companies invalid, and demanded the KRG hand over production from its fields to Baghdad. Since then, Kurdish leaders have stood firm in rejecting the ruling, describing it as "unconstitutional and politically motivated".
In its statement, the judicial council of Iraqi Kurdistan claims the federal supreme court "has no authority" to repeal the KRG's oil and gas law. It refers to Article 112 of the Iraqi constitution of 2005, which granted the federal government in Baghdad supervision over Kurdish oil and gas fields that were operating back then. This means that "oil fields discovered in the Kurdistan region since 2005 fall under the jurisdiction of the KRG", it said. All oil and gas fields currently operating in the Kurdish region started commercial production after August 2005, the judicial council said.
Last month Iraq's federal oil ministry proposed setting up a new oil company in the Kurdistan region. It raised the stakes at the beginning of May by saying it will implement the supreme court ruling because attempts to engage with Kurdish authorities have "come to nothing". It has also reached out to international oil companies operating in the Kurdish region offering them the opportunity to enter into restructured contracts that will bring them into compliance with Iraqi law and allow them to continue operations.
