IEA deals with Baghdad exclusively on energy: Update

Adds IEA response in paragraph 4

Paris-based energy watchdog the IEA deals exclusively with Baghdad on Iraqi energy matters, according to Iraq's oil ministry.

The statement — issued following a meeting between oil minister Ihsan Ismael and IEA executive director Fatih Birol in Paris on 27 May — comes as Baghdad attempts to reassert its authority amid an oil contracts dispute with the Kurdistan Regional Government (KRG) in northern Iraq.

"The agency deals with Baghdad exclusively as it possesses the authority and ability to take legal decisions on the energy file at the internal and external level," the ministry said.

The IEA declined to comment on the ministry's statement but pointed to a tweet from Birol in which he says he "reiterated to the minister the IEA's longstanding support for Iraq's energy sector reforms".

The meeting coincides with Baghdad increasing pressure on the KRG to adhere to a supreme federal court ruling from February which deemed the provincial government's oil and gas law unconstitutional, declared all oil contracts signed by the KRG with foreign companies invalid, and gave the federal oil ministry oversight of crude production in the country's semi-autonomous Kurdistan region.

The oil ministry in Baghdad intends to set up a new company based in Iraqi Kurdistan to enter into service contracts with companies operating in the region. The ministry confirmed on 21 May that Ismael sent letters to companies operating in the Kurdish region calling on them to enter into restructured contracts so that they are in compliance with Iraqi law. The KRG continues to reject the court ruling, saying it was made on political grounds.

Last week's meeting with the IEA also stressed "the need to unify national energy plans, and work to develop and rehabilitate oil and gas fields… in a manner that achieves the optimal investment of national wealth", the oil ministry said.

Ismael also made a trip to London last week, during which he discussed with BP the potential to raise crude capacity at Iraq's 1.5mn b/d Rumaila field to 1.7mn b/d. Iraq aims to grow its overall crude output capacity to 6mn b/d by the end of 2027, Ismael said earlier this month. It marks a sharp downgrade from Baghdad's previous 8mn b/d target.

By Bachar Halabi