Bloomberg News

Iraq Kurds Draft Law for Fund to Invest Region’s Oil, Gas Income

December 12, 2011

Dec. 11 (Bloomberg) -- Iraq’s semi-autonomous Kurdistan Regional Government proposed a draft law to set up a fund to manage revenue from the sale of oil and natural gas produced in the region, according to the KRG’s official website.

Kurdish authorities aim to put money into a fund to benefit “future generations,” and also to invest in regional projects and possibly into the KRG’s Ministry of Natural Resources to help develop oil and gas, according to the draft published on the website. The money will include energy-related payments received from Iraq’s central government, the statement said today.

Kurdish authorities and Iraq’s central government have disagreed for years over contracts the KRG has reached with foreign energy companies. The government in Baghdad refuses to recognize production-sharing agreements signed by the KRG, as Iraq’s Oil Ministry agrees only to service contracts that pay producers a per-barrel fee instead of a share of any crude.

Iraq’s northern Kurdish region contains 45 billion barrels of oil and 3 trillion to 6 trillion cubic meters of gas, KRG Natural Resources Minister Ashti Hawrami said in September. The Iraqi government says the country’s total crude reserves are 143.1 billion barrels. The Kurdish region has potential to export 100,000 barrels of oil a day, according to the KRG. The region has attracted more than $10 billion in energy investments, KRG Prime Minister Barham Salih said May 5.

The fund will be run by a six-member board led by a president with the rank of deputy minister, the statement said.

--Editors: Bruce Stanley

To contact the reporter on this story: Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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