The Kurdistan Regional Government (KRG) has issued the follow statement on the reported granting of a contract to BP for the development of oilfields in Kirkuk:
Neither Iraq’s federal oil ministry nor state-owned oil companies have the right to unilaterally award contracts to develop currently producing fields in Kirkuk province or in other adjacent areas, Kurdistan Regional Government’s Ministry of Natural Resources said today.
Management of oil and gas in Iraq does not fall under the exclusive powers of the federal government, the ministry said, adding, “Article 112 of Iraq’s Constitution states that the federal government and the regional and producing governorates shall together manage the present producing oil fields.”
The term ‘present producing fields’ in article 112 means the fields already under production at the time Iraq’s permanent Constitution was approved in 2005.
The ministry said, “However, article 115 provides the exclusive right to the regions and governorates to manage all future fields — that is, the undeveloped discoveries and unexplored structures.”
It said the KRG agrees that “in both cases – that is, present and future fields – the net revenue derived from the exploitation of any of the oil and gas resources belongs to all Iraqi people and as such is required to be distributed in a fair manner in proportion to the population”.
The Ministry of Natural Resources’ comments followed reports that the state-owned North Oil Company had signed or was about to sign a preliminary agreement with BP to increase production at the Kirkuk field.