KRG Warns SOMO Customers

The Kurdistan Regional Government (KRG) threatened on Wednesday to take legal action against buyers of Iraqi oil unless the autonomous region is paid its share of revenue from any sales.

The full text of the statement from the KRG follows:

Under Article 112 of the Iraqi Constitution, the Iraqi federal government is legally required to distribute oil and gas revenues from present fields “in a fair manner in proportion to the population distribution in all parts of the country.”

Under Article 112, the KRG is entitled to 17% of all proceeds from oil sales by the Federal Oil Ministry and the State Oil Marketing Organisation (SOMO) (or any other division of the Iraqi federal government).

The KRG has the right, in circumstances where the Iraqi federal government is not sharing revenues in accordance with the Iraqi Constitution, to take such action as the KRG considers appropriate to obtain all entitlements the Iraqi federal government is required to pay to the KRG under the Iraqi Constitution. This right is reflected in Kurdistan law.

Since at least 2005, the Federal Oil Ministry has failed to comply with its constitutional and legal duties to the KRG, including under Article 112. The Federal Oil Ministry and SOMO continue to sell and to seek to sell oil, gas and other petroleum products to third parties, and to retain the full proceeds of such sales, all in violation of the KRG’s express constitutional and legal rights, and without the participation or approval of the KRG.

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