MNR Welcomes passage of Oil & Gas Revenue Fund Law through Kurdistan Parliament
The Ministry of Natural Resources (MNR) welcomes the passage of the Oil & Gas Revenue Fund law through the Kurdistan Parliament and congratulates the people of the Kurdistan Region, the members of parliament, and the Kurdistan Regional Government Council of Ministers for the entry of the law into the Region’s statute books. MNR will ensure that the new legislation is implemented as soon as possible.
The Oil and Gas Revenue Fund law authorizes the Council of Ministers to nominate a board, approved by the Parliament, that will provide public accounts for the revenue that the KRG accrues from oil exports, refined products, and oil company bonuses within the framework of the KRG’s oil and gas contracts, the Kurdistan Oil and Gas Law no 22 of 2007 and the Iraq Constitution of 2005.
The Oil and Gas Revenue Fund is an important institutional development in the KRG, and was instigated and sponsored by MNR to bolster transparency in the oil and gas sector.
Under the Law, oil revenues may be allocated for the following categories: the Kurdistan Region's annual budget; INVESTMENT spending; oil infrastructure; environmental protection; and a “future generation’s” wealth fund.
The Fund will act as an accounting mechanism and will improve public understanding of how much money the KRG generates from its independent oil exports and refined products. It will also lead to greater public awareness that oil revenues are transferred and audited in line with international standards.
MNR foresaw the need for such a revenue law and inserted a provision in this regard in Article 16 of the Kurdistan Region’s Oil and Gas Law no 22 of 2007.
Under MNR’s initiative, the first draft of the law was submitted to parliament in 2011, but the parliament term ended before that law could be debated.
The draft was then redrawn by MNR and the Council of Minister’s legal advisors, and returned to parliament in early 2013. There were initial discussions, but the draft again got stuck and the parliament finished without passing it into law.
The Council of Ministers subsequently withdrew the draft law to make it consistent with Law No 5 of 2013, and returned it to parliament in October 2014. Over the last 6 months, the new draft law was discussed and debated in detail by MPs, who voted it through last week.
Welcoming the new legislation, Natural Resources Minister Ashti Hawrami said: “This is an important for the people of the Kurdistan Region. It is another building block in the institutional development of our oil and gas sector. It will aid public understanding of the inflows and outflows of oil revenues, and it is in line with Kurdistan’s oil and gas law and the Iraqi Constitution.”
Minister Hawrami added that other legislation provided for in the Oil & Gas Law of 2007 remained pending in parliament, including an MNR-sponsored bill to establish the Kurdistan Exploration and Production Company (KEPCO). Another MNR-sponsored bill relating to the official marketing of Kurdistan’s oil (KOMO) is ready to be sent to parliament soon. “We hope the Kurdistan Parliament will give priority to debating these important draft laws as soon as possible,” Minister Hawrami said.