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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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Israel's Mission Against Hamas 'Not Accomplished', Says New Military Chief 

Then head of the southern command, Israeli army major general Eyal Zamir, is pictured near the Israel-Gaza border in the southern kibbutz of Nahal Oz on April 20, 2018. (AFP)
Then head of the southern command, Israeli army major general Eyal Zamir, is pictured near the Israel-Gaza border in the southern kibbutz of Nahal Oz on April 20, 2018. (AFP)
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Israel's Mission Against Hamas 'Not Accomplished', Says New Military Chief 

Then head of the southern command, Israeli army major general Eyal Zamir, is pictured near the Israel-Gaza border in the southern kibbutz of Nahal Oz on April 20, 2018. (AFP)
Then head of the southern command, Israeli army major general Eyal Zamir, is pictured near the Israel-Gaza border in the southern kibbutz of Nahal Oz on April 20, 2018. (AFP)

New armed forces chief Lieutenant General Eyal Zamir said during his inauguration in Tel Aviv on Wednesday that Israel's mission to defeat Palestinian group Hamas was "not accomplished".  

"I accept command of the (Israeli military) with modesty and humility... Hamas has indeed suffered a severe blow, but it has not yet been defeated. The mission is not yet accomplished," Zamir said, amid deadlock in negotiations on next steps in a ceasefire with Hamas in Gaza. 

Prime Minister Benjamin Netanyahu told Zamir that Israel is "determined" to achieve victory in the multi-front war that began with Hamas's October 2023 attack.  

"A very heavy responsibility rests on your shoulders, the results of the war will have significance for generations, we are determined to achieve... victory" Netanyahu told Zamir during his inauguration. 

Former tank commander and director of the defense ministry Zamir replaces outgoing chief of staff Lieutenant General Herzi Halev, who resigned admitting he failed to fulfil his mandate.  

Zamir, 59, is being sworn in at a sensitive time in Israel's war with Hamas, with the ceasefire that took effect on January 19 hanging in the balance.  

Announcing his appointment last month, Netanyahu said he had high hopes that Zamir would help achieve Israel's goal of "absolute victory" against Hamas. 

Zamir will also take over operations in the occupied West Bank, where the military has deployed tanks in recent weeks for the first time in 20 years.  

His appointment also comes at a moment of high tension for Israel with its arch-foe Iran.  

Zamir wrote in a 2022 policy paper for the Washington Institute for Near East Policy that Israel needed to adopt a tougher approach in order to stop Iran from developing nuclear weapons. 

Pushing for greater cooperation with the United States against what he called the "Iran axis", Zamir advocated "offensive action" in order to guarantee success.  

His position on Iran mirrors that of Netanyahu, who recently said that Israel plans to "finish the job against Iran's terror axis".  

Zamir, who led key operations during the second Palestinian intifada or uprising, served as Netanyahu's military secretary from 2012 to 2015.  

He is the founder of the right-wing think tank Israel Defense and Security Forum.  

In contrast to Halevi, who avoided the spotlight, Zamir comes across as a powerful figure.  

At a defense ministry event a day after his appointment, Zamir, a father of three, was quoted as saying that 2025 would be "a year of continued fighting". 

"The war has demonstrated that we must be self-reliant," he said.  

As head of the defense ministry, Zamir is credited with some of Israel's biggest and most significant defense procurements.  

"He understands very well what big wars are all about and how to fight them," said Amir Avivi, a former Israeli general who now runs a network for former security officials.  

Zamir cuts a powerful frame, his burly build sending a clear message that he means business.  

Avivi, who has known Zamir for more than 20 years and spent a year with him at the Israeli College for National Security, described him as being "mission-oriented", "detail-oriented" and "strict". 

He said Zamir has a "deep understanding" of the Gaza front and even authored "a very detailed plan to conquer all of Gaza" while serving as head of Southern Command from 2015 to 2018.  

Saying he had spoken with Zamir since his appointment, Avivi added: "I think he has a very clear understanding that he was chosen for one thing -- to bring total victory to Israel on all fronts."  

Jonathan Conricus, a former Israeli army spokesman who served with Zamir, also said the incoming chief would have to "navigate strategic challenges of the most sensitive nature", including restoring public trust.  

Born in Israel's southernmost city Eilat, Zamir, whose paternal grandfather immigrated from Yemen and whose mother's family arrived from Syria, joined the military in 1984.  

Unlike previous chiefs of staff, who served in the distinguished paratroopers' unit or in the Golani infantry brigade, Zamir began his career in the Armored Corps.  

He served through the first and second intifadas holding senior combat and command roles. 

In 2002, he led a brigade that captured the refugee camp adjacent to the West Bank city of Jenin, a hotbed of Palestinian militancy.  

The army laid siege to the camp for more than a month amid fierce fighting that saw hundreds of homes levelled, and 52 Palestinians and 23 Israeli soldiers killed.  

Zamir was later appointed head of the army's southern command, where he led efforts to cut off Hamas tunnels.  

From 2018 to 2021, he served as deputy chief of staff under Lieutenant General Aviv Kochavi, tasked with implementing the military's multi-year plan.