BAGHDAD — Iraq won an arbitration lawsuit, filed last Thursday against Ankara over the export of crude oil from the Kurdistan region through the Turkish port of Ceyhan without reference to the Iraqi Oil Marketing Company "SOMO" by the arbitration panel of the International Chamber of Commerce in Paris.

This lawsuit is against Turkey for "violating the provisions of the Iraqi-Turkish Pipeline Agreement signed in 1973", which stipulates that the Turkish government must comply with the instructions of the Iraqi side regarding the movement of crude oil exported from Iraq to all storage and discharge centers and the terminal.

Al Jazeera Net's questions review the effects of the international judicial ruling on Baghdad and Erbil, and the future of controlling the oil wealth in Iraq.

When did the lawsuit begin?

In the final weeks of former Iraqi Prime Minister Nouri al-Maliki's second term in 2014, the government filed a lawsuit in a commercial court of the International Chamber of Commerce of the Paris Club of Creditors against Ankara over the Kurdistan region's oil sales through Turkish territory.

The lawsuit was stopped by former Prime Minister Haider al-Abadi at the end of 2014, and then activated again in early 2017 before being frozen again, so that the resigned Prime Minister Adel Abdul Mahdi came to stop it completely at the request of the Kurdish leadership, before it was resumed by the Iraqi Ministry of Oil under Prime Minister Mustafa Al-Kazemi and former Oil Minister Ihsan Abdul Jabbar in 2021.

The Iraq-Turkey pipeline can pump up to 900,1 barrels per day, representing roughly 500 percent of total daily global demand, by SOMO and the KRG, but <>,<> barrels are currently being pumped from fields in northern Iraq.

In the latest official statistics, the quantities of Iraqi oil exported, for February, amounted to more than 92 million barrels at a daily rate of 3 million and 295 thousand barrels, with a financial value of more than 7 billion dollars.


What are the effects of the judicial decision on Iraq's oil wealth?

The official spokesman for the Iraqi Ministry of Oil, Assem Jihad, outlines several benefits of the judicial ruling, including the affirmation of the national sovereignty of oil wealth and its management by the Federal Ministry of Oil, and the ruling helped to refer to the 1973 agreement.

Jihad told Al Jazeera Net that the decision will contribute to maximizing oil financial resources, stabilizing crude exports, and strengthening Iraq's role in global oil markets.

What impact will the decision have on Iraq's relationship with Turkey?

The official spokesman of the Iraqi Ministry of Oil believes that the decision will not affect the nature of bilateral relations since there are common interests between the two countries, including that Iraq's oil exports flow through the Turkish port of Ceyhan, and this is beneficial to both parties.

Jihad added that Turkey announced its commitment to the decision of the International Court of Arbitration, and informed Baghdad and Erbil of this, and is waiting for the position of the Iraqi government, which is authorized to manage the process of exporting the country's oil abroad, to inform it of the new mechanisms that will be adopted for oil exports, including oil from the Kurdistan region.

The government official stressed the need for Iraq's neighbors to respect the agreements and treaties signed with them, especially those related to sovereign issues, including oil exports through foreign ports.

Asim Jihad outlines the benefits of the judicial ruling for Iraq, including the affirmation of the national sovereignty of oil wealth (Al-Jazeera)

What is the reading of the Parliamentary Oil and Gas Committee on the judicial decision?

Iraqi Zainab Juma Al-Moussawi, a member of the Parliament's Oil, Gas and Natural Resources Committee, describes the decision as "important" because it will achieve two factors:

  • The decision exposed the Kurdistan Regional Authority for its failure to abide by the judicial decisions issued by Baghdad, where the latter can file a lawsuit against Erbil for violating Article 329 of the Iraqi Penal Code regarding oil wealth.
  • The decision was ratified by the arbitrators, the secretariat of the Court of Arbitration and the International Court of Arbitration for Commercial Arbitration, and stipulated that Turkey would pay $ 1.5 billion to Iraq for the export of Kurdish oil through the port of Ceyhan between the years (2014-2018) without Baghdad's approval.

What is the Kurdistan Region's position on governance?

At the same time, Dr. Arshad Taha, economic advisor to the presidency of the Kurdistan Regional Parliament, ruled out the impact of the international decision on the region and its oil fields.

In an interview with Al Jazeera Net, Taha linked the decision to the political agreement signed between Baghdad and Erbil, under which the Iraqi government was formed headed by Mohammed Shia al-Sudani, which provides for the support of the Kurds in exchange for solving problems related to the oil and gas sector, the federal budget and the disputed areas between the center and the region.

Taha added that the agreement concluded between the political parties (Shiites, Sunnis, Kurds) in September 2022, months before the issuance of the international resolution, stated that the new government is working on legislating the federal oil and gas law within a period not exceeding 6 months, in agreement between the governments of Baghdad and Erbil, and allocates the region's share of the budget on the basis of estimating the population until the census is conducted.

The economic advisor pointed out that 12.6% was agreed upon for the Kurdistan region in the 2023 budget, which the government voted on and sent to the House of Representatives, revealing that there are ongoing discussions on the draft oil and gas law to resolve differences between the two governments permanently.

Arshad Taha reveals that there are ongoing talks on the draft oil and gas law to resolve the differences of the two governments permanently (Al Jazeera)

Judicial Judgment and Fiscal Budget 2023

Oil and energy expert Dr. Bilal Al-Khalifa says that the Iraqi government lost the spoils of the arbitration award because it legislated the budget law for 2023, as it included many paragraphs that grant the region great powers.

The Caliph added – in an interview with Al Jazeera Net – that Article 13 included the settlement of financial dues to the region, while the second paragraph of the same article allowed the export of Erbil about 400 thousand barrels per day outside "SOMO" at the official price.

He added that the budget also included handing over oil money in a bank account at the disposal of the president of the region and not the head of the federal government, as well as sending the money monthly from Baghdad to Erbil to pay the salaries of the region's employees.