Professor Crawford’s conclusion that the Kurdistan Region Oil and Gas Law was consistent with the Iraqi Constitution was provided in February 2008. He had also concluded that the KRG’s existing contracts entered into for oil and gas exploration and exploitation since 1992 were valid unless they conflicted with the Constitution. Legal experts interviewed by this news service in the years since this opinion was made say that the reality on the ground is that some form of legal accommodation needs to be reached between the Kurds and the Iraqi Federal Government and that this, at the end of the day, will trump the legal formalities.
Legal agreement would aid consolidation
The issue of guarantees will take on added significance if and when companies operating in Kurdistan become takeover targets for larger existing oil and gas firms, as well as new entrants looking to access the Region and use it as a toe-hold for expansion elsewhere in Iraq.
Oil India, the state-owned energy group, has specifically identified the Kurdistan Region as an area it was considering acquiring assets in. And Baz R. Karim, the president and owner of Kar Group, recently told Mergermarket that M&A activity in this sector/region was likely to take off and that his company was interested in participating as a consolidator. Oil and gas services companies with an enterprise value of about USD 100m were the kind of targets Kar would consider, he said, thereby putting a larger player like Hunt well out of its range.
Comments are closed.