Iraq’s top court says Kurdistan shouldn’t sell oil independently

(Bloomberg) — Iraq’s Federal Supreme Court ruled that Kurdistan shouldn’t produce and export oil and gas independent of the central government in Baghdad.

The court on Tuesday said contracts between the Kurdistan Regional Government’s Ministry of Natural Resources and international companies should be voided. Iraq’s federal government has on numerous occasions in the past asserted its right to resources in the semi-autonomous region, but Kurdistan has carried on pumping and selling regardless.

The KRG considers the decision unjust and will “take all constitutional, legal, and judicial measures to protect and preserve all contracts made in the oil and gas sector,” it said in a statement. It will continue to work with the federal government on this matter, the KRG said.

Baghdad has long sought to bring Kurdish production under its control in exchange for funds from the national budget as compensation. The federal government has threatened law suits and penalties on countries and companies that collaborate with Kurdistan’s oil industry.

One of Iraq’s oldest-producing oil fields in Kirkuk was seized from the KRG by federal troops in 2017. The field and surrounding area had previously fallen into the hands of Islamic State before Kurdish forces ousted the militants and exploited the field themselves.

While control over the Kurdistan region’s resources has remained disputed, a stalemate over the past few years has allowed the KRG to pump and sell its oil and gas largely unencumbered.