At a Glance:

• Political factions agree to submit the long-delayed Oil and Gas Draft Law to Parliament.
• Supported by the State Administration Coalition for passage in the current legislative term.
• Formally defines oil management and revenue-sharing among Baghdad, Erbil, and producing provinces.
• Settles nearly 20 years of political gridlock, following four failed draft attempts since 2005.

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After nearly two decades of political deadlock, Iraqi political forces have forged a preliminary consensus to send the long-awaited Oil and Gas Draft Law to Parliament. The breakthrough marks a critical turning point in ending entrenched energy sector disputes between the Federal Government in Baghdad and the Kurdistan Regional Government (KRG), laying out a unified framework for hydrocarbon extraction and nationwide revenue distribution.

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Key Statements and Focus Area:

• Parliamentary Support:"A political agreement exists among most blocs to pass the law in coordination with the government," confirmed Council of Representatives member Adel Al-Mahlawi.
• Coalition Commitment: "The draft law must be forwarded to the Council of Representatives to ensure its enactment within the current parliamentary term," emphasized the State Administration Coalition following their leadership meetings.
• Regulatory Purpose:"This law serves as the core foundation to regulate national oil resources, resolve jurisdictional disputes, and protect the rights of producing provinces," noted parliamentary figures involved in the consultations.

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Cross-Party Alignment in the State Administration Coalition

During recent high-level proceedings, the State Administration Coalition affirmed the necessity of advancing the legislation through the Council of Representatives without further delay. Lawmakers across major parliamentary blocs have expressed readiness to align with the executive branch to shepherd the bill through its readings, prioritizing it as essential economic and administrative governance.

Resolving Regional Jurisdictions and Local Rights

The draft law introduces explicit mechanisms to define authority over oil production, field development, and revenue management among central federal authorities, the Kurdistan Region, and key oil-producing governorates. By establishing clear operational boundaries, the bill aims to prevent unilateral contracting, clarify export mechanisms, and guarantee equitable financial distributions guaranteed under the constitution.

Overcoming Two Decades of Political Deadlock

Attempted four times since 2005, previous iterations of the legislation repeatedly foundered due to fierce rivalries over managerial jurisdiction, contract validity, and regional autonomy. The new momentum reflects growing urgency among Baghdad and Erbil leadership to establish legal certainty, stabilize national budgets, and rebuild investor confidence across Iraq’s primary economic sector.

FYI

The absence of a federal hydrocarbon framework has caused friction between Baghdad and Erbil for almost two years, exacerbated by legal rulings, halted northern crude exports via Turkey, and revenue-sharing conflicts.The push by the State Administration Coalition to enact the draft law comes alongside broader efforts to finalize key structural legislation including the Federal Council and PMF laws to complete Iraq’s constitutional framework. Securing a permanent legal basis for energy management is increasingly viewed as vital to safeguarding public finances, protecting oil export continuity against broader regional disruptions, and solidifying long-term federal stability.

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