Iraqi Oil Minister Ihsan Abdul-Jabbar stressed the importance of reviewing the oil contracts concluded by the Kurdistan region, and called for the establishment of a new oil company to be based in Erbil (the region's center) to take over the management of oil activity in the region.

And Abdul-Jabbar, who was speaking at the conclusion of talks held on Monday with Kurdish officials, called for a review of contracts and agreements concluded by the regional government with countries and oil companies.

He said - according to a statement issued by the Ministry of Oil - "The basic principles included sending all contracts and agreements concluded by the Kurdistan Regional Government with countries and oil companies for the purpose of reviewing, amending and improving them, as well as transferring the contracting party from the Ministry of Natural Resources to an oil company established for this purpose by a decision of the Council of Ministers." Ministers shall be based in Erbil.

The minister called for opening a bank escrow account in one of the international banks to deposit the revenues from the sale and export of crude oil, to be affiliated with the Ministry of Finance and used to arrange payments in favor of the region in the event of a delay in sending it from the Federal Ministry of Finance.

These talks follow a decision of the Federal Court (the highest judicial authority in the country) that gave the Oil Ministry in Baghdad the authority to manage oil and gas fields in the north of the country.

For his part, the head of the Kurdistan Region delegation to the talks, Khaled Shwani, said that the meeting was characterized by frankness, and it was agreed to put in place mechanisms that could form a future action plan to address the problem of oil in all its aspects in a radical way.

But Shwani considered, at the conclusion of his speech, that the oil and gas law is the best solution to remove all problems, and that the last meeting represented a good start for cooperation between the Ministry of Oil and the regional government.

The Taqtaq oil field in Erbil is the largest field in the Kurdistan region (Reuters)

Violation of the constitution

The Iraqi Federal Court had ruled in mid-February that the oil and gas law in the Kurdistan region was unconstitutional, and obligated the region to hand over oil to the federal government.

It is noteworthy that the region had passed in 2007 its own law that laid down the directives through which it manages oil and gas resources.

In May 2018, the Federal Court began examining the lawsuit filed by the federal government against the Kurdistan Regional Government, in which it demands that the produced oil be delivered to Baghdad and that it may not be exported independently, in implementation of the provisions of the Constitution and the relevant applicable laws.

The Kurdistan region exports oil independently from Baghdad via a line heading to the Turkish port of Ceyhan on the Mediterranean and from there to international markets.

During the previous years, the regional government concluded contracts with major international oil companies - including ExxonMobil and Rosneft - to develop its oil fields, which pump about 500,000 barrels per day.

But the regional government announced its rejection of the court's decision, stressing that it will continue to apply its own oil and gas law.