Transparency and fairness have been the cornerstones of the Kurdistan Region’s investment laws and policies. The Extractive Industry Transparency Initiative was incorporated as an article in the regional oil and gas law in 2007 and helps ensure transparency and proper budgetary management of oil revenues. The full version of the Kurdistan Oil and Gas Law has been available to the public since 2007, and the Ministry of Natural Resources has ensured that all production-sharing contracts including any amendments are available for all to see online.
Please click these links to read the Kurdistan Oil and Gas Law, a model production sharing contract, and PSCs signed with companies.
Continuing to ensure transparency and the freedom of information across the industry will encourage the kind of investment that benefits all of Iraq.
Under Article 15 of the Kurdistan Oil and Gas Law, revenues from current and future fields will be subject to regular independent audit and available for public viewing, and the Kurdistan Oil Trust Organization shall discharge its responsibilities consistent with the Principles and Criteria of the Extractive Industries Transparency Initiative (EITI), as set out in the EITI Source Book of March 2005. The EITI aims to help citizens in oil producing countries across the world to follow the flows of oil and money.
Unfortunately, at the launch of the last Iraq-EITI report in Baghdad in April 2013, neither the KRG nor the senior supervising World Bank official was invited, and the Iraq-EITI council presented a document from which the chapter on the Kurdistan Region had been unilaterally removed. This underhand tactic set back the cause of transparency for the Iraqi people and damaged the reputation of EITI for not ensuring impartiality in the revenue reporting process.
The procurement process at the Ministry of Natural Resources involves joint input from both the oil companies and the ministry, to ensure that a competitive, fair and transparent bidding process is conducted. In line with our procurement policy, the ministry ensures that all registered bidders are invited to tender where applicable, all the while ensuring an open door policy so that bidders, as we refer to them, or subcontractors are able to voice concerns.
The procurement process is conducted by the international oil company (IOC), however it allows for the joint management committee to monitor the process at various steps. The management committee chairman (a member of the ministry) along with his fellow members and advisers are required to approve the bid strategy, to ensure that a fair procurement procedure has been designed that involves all registered participants and does not handicap any of the tenderers without firm justification.
During the process, technical and commercial recommendations are evaluated by both the IOC and the ministry, with the management committee chairman from the ministry providing final approval. The involvement and advice of both the ministry and the IOC in the procurement process has helped to develop trust and transparency in the system, allowing for open technical and commercial discussions that ultimately promote the service sector in the region in support of oilfield operations.