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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
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Iraq’s Kurdistan Works to Establish Two Oil Firms as Erbil-Baghdad Tensions Rise

A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)
A picture shows a view of the area around the citadel of Erbil, the capital of the autonomous Kurdish region of northern Iraq, as dust engulfs the sector on May 24, 2022. (AFP)

Iraq's Kurdistan Regional Government (KRG) is working to establish two oil firms, the latest move in the battle between Erbil and Baghdad to control the oil sector in the semi-autonomous region.

The KRG's new oil firm KROC would specialize in oil exploration, while the second - KOMO - would focus on oil exports and marketing from the semi-autonomous region, a spokesperson said in a statement on Friday.

The regional government has presented the idea and discussed it with the federal government in Baghdad recently, the KRG spokesperson said in a statement.

The statement follows months of disputes between Erbil and Baghdad after a February federal court ruling that deemed the legal foundations of the Kurdistan region's oil and gas sector unconstitutional.

The oil ministry in Baghdad has since made fresh attempts to control revenue from the Kurdistan region, including summoning seven firms operating there to a commercial court on May 19. The firms were Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran and WesternZagros.

The commercial court sitting has been postponed twice as some of the representation for these international oil firms did not have power of attorney, several sources told Reuters. The court session is due to resume on Monday, June 20.

As well as announcing plans to establish its own oil company in the Kurdistan region, the Iraqi oil ministry has ordered international lead contractors and subcontractors through Basrah Oil (BOC) and Iraq's national oil firm (Inoc) to pledge not to work on contracts or projects there.

Through letters sent on June 7 and 12, the firms were given three months to terminate existing contracts or projects in the KRG oil sector or face being blacklisted, according to two sources familiar with the matter.

The oil ministry is using two law firms - Vincent and Elkins and Cleary Gottlieb Steen and Hamilton - to help with gaining control of the KRG oil sector, according to two sources. Both firms have declined to comment.

The KRG has repeatedly rejected the federal court ruling. On June 5, the KRG's ministry of natural resources filed a civil suit against the minister of oil in Baghdad, Ihsan Ismael, for sending emails and letters to intimidate oil firms operating in the Kurdistan region and for interfering with the contractual rights of these firms and the KRG, according to a June 13 statement.

Also on June 5, the Erbil court of investigation ruled that the commercial court sessions against international oil firms must be brought to the Erbil court.

There have been years of attempts by the federal government to bring KRG revenues under its control, including local court rulings and threats of international arbitration.

The implications of the latest dispute are not fully clear as more than eight months since elections in Iraq, the formation of a government is still underway.

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Lebanon Military Says One Soldier Killed, 18 Hurt in Israeli Strike on Army Center

Lebanese army soldiers and people stand at the site of an Israeli strike in the town of Baaloul, in the western Bekaa Valley, Lebanon October 19, 2024. REUTERS/Maher Abou Taleb
Lebanese army soldiers and people stand at the site of an Israeli strike in the town of Baaloul, in the western Bekaa Valley, Lebanon October 19, 2024. REUTERS/Maher Abou Taleb
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Lebanon Military Says One Soldier Killed, 18 Hurt in Israeli Strike on Army Center

Lebanese army soldiers and people stand at the site of an Israeli strike in the town of Baaloul, in the western Bekaa Valley, Lebanon October 19, 2024. REUTERS/Maher Abou Taleb
Lebanese army soldiers and people stand at the site of an Israeli strike in the town of Baaloul, in the western Bekaa Valley, Lebanon October 19, 2024. REUTERS/Maher Abou Taleb

An Israeli strike on a Lebanese army center on Sunday killed one soldier and wounded 18 others, the Lebanese military said.

It was the latest in a series of Israeli strikes that have killed over 40 Lebanese troops, even as the military has largely kept to the sidelines in the war between Israel and Hezbollah.

There was no immediate comment from the Israeli military, which has said previous strikes on Lebanese troops were accidental and that they are not a target of its campaign against Hezbollah.

Lebanon's caretaker prime minister, Najib Mikati, condemned it as an assault on US-led ceasefire efforts, calling it a “direct, bloody message rejecting all efforts and ongoing contacts” to end the war.

“(Israel is) again writing in Lebanese blood a brazen rejection of the solution that is being discussed,” a statement from his office read.

The strike occurred in southwestern Lebanon on the coastal road between Tyre and Naqoura, where there has been heavy fighting between Israel and Hezbollah.

Hezbollah began firing rockets, missiles and drones into Israel after Hamas' Oct. 7, 2023, attack out of the Gaza Strip ignited the war there. Hezbollah has portrayed the attacks as an act of solidarity with the Palestinians and Hamas. Iran supports both armed groups.

Israel has launched retaliatory airstrikes since the rocket fire began, and in September the low-level conflict erupted into all-out war, as Israel launched waves of airstrikes across large parts of Lebanon and killed Hezbollah's top leader, Hassan Nasrallah, and several of his top commanders.

Israeli airstrikes early Saturday pounded central Beirut, killing at least 20 people and wounding 66, according to Lebanon's Health Ministry. Hezbollah has continued to fire regular barrages into Israel, forcing people to race for shelters and occasionally killing or wounding them.

Israeli attacks have killed more than 3,500 people in Lebanon, according to Lebanon’s Health Ministry. The fighting has displaced about 1.2 million people, or a quarter of Lebanon’s population.

On the Israeli side, about 90 soldiers and nearly 50 civilians have been killed by bombardments in northern Israel and in battle following Israel's ground invasion in early October. Around 60,000 Israelis have been displaced from the country's north.

Hezbollah fired barrages of rockets into northern and central Israel on Sunday, some of which were intercepted.

Israel's Magen David Adom rescue service said it was treating two people in the central city of Petah Tikva, a 23-year-old man who was lightly wounded by a blast and a 70-year-old woman suffering from smoke inhalation from a car that caught fire. The first responders said they also treated two women in their 50s who were wounded in northern Israel.

It was unclear whether the injuries and damage were caused by the rockets or interceptors.

The Biden administration has spent months trying to broker a ceasefire, and US envoy Amos Hochstein was back in the region last week.

The emerging agreement would pave the way for the withdrawal of Hezbollah fighters and Israeli troops from southern Lebanon below the Litani River in accordance with the UN Security Council resolution that ended the 2006 war. Lebanese troops would patrol the area, with the presence of UN peacekeepers.