Bickering Over Oil and Gas Law Hurts Foreign Investment
ERBIL, Iraqi Kurdistan -- Energy experts say that foreign investors are concerned about the bickering over Iraq’s oil and gas law and may be reluctant to invest in the country’s vast natural resources until legislation is passed.
For years, Baghdad and the Kurdistan Region have disagreed on the details of Iraq’s oil and gas law including whether regions can strike deals for natural gas projects.
The Kurdistan Region has its own investment law and the central government still works under laws from Saddam Hussein’s era.
A new row between Baghdad and Erbil started last week following reports that the Kurdish authorities had signed a contract with the American oil giant ExxonMobil, which already has an existing contract with Baghdad.
Jonathan Brown, Kurdistan’s project manager for the Canadian oil company Talisman Energy, which currently works in three different oil fields in Kurdistan, said the lack of clarity regarding Iraq’s oil and gas laws will hinder foreign investment in the region and Iraq.
“It’s a big problem; any company that wants come to Kurdistan or Iraq, the first thing they talk about is the law issue,” he said.
Todd F. Kozel, chairman and CEO of the British oil firm Gulf Keystone Petroleum Co., maintained that oil-related conflicts between Baghdad and Erbil will hurt the industry’s development but remains hopeful that the issues will be resolved.
“Our company has invested millions of dollars in its projects in the Kurdistan region and I believe that KRG and central government will solve the issue, or we would not have invested a lot of money in the region,” he said.
There were reports late last month that Iraqi Prime Minster Nuri al-Maliki and Kurdistan Regional Government (KRG) Prime Minster Barham Salih agreed to amend Iraq’s 2007 oil and gas law by December 31.
That law was approved by most of Iraq’s political factions.
In August, Kurdish officials were upset when Iraq’s cabinet hastily passed a new draft of Iraq’s oil and gas law without consulting the Kurds. A previous draft of the law had sat in Parliament since 2007.
Kurdish leaders accused Iraq’s prime minister of becoming authoritarian and creating an “economic dictatorship.”
Natt Arian, a Kurdish investor based in Australia, believes that foreign investors have the right to be concerned about Iraq’s oil and gas law because it needs to protect their business. Arian also said the KRG should do more to attract foreign investment.
“Kurdistan should do more to expose the region to foreigners and give them more information about the situation,” he said. “For example, Australians haven’t got a lot of information about Kurdistan.”
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