Office of the KRG Minister for Natural ResourcesKurdistan Regional Government
22 October 2006
Today the Ministry of Natural Resources of the Kurdistan Region of Iraq published a final draft of a Petroleum Act for the Region, for consideration by the Kurdistan National Assembly, the Region's parliament.
“The KRG draft Petroleum Act is the beginning not only of world-class petroleum development for the Kurdistan Region, but also world-class revenue management for its people,” said Dr. Ashti Abdullah Hawrami, Minister of Natural Resources. “The principles of transparency and accountability will be rock solid.”
The Petroleum Act is designed to attract private investors with a competitive standard production sharing agreement. The Act requires private contractors to comply with the principles of good corporate citizenship as outlined in the UN’s Ten Principles of the Global Compact, and requires that the Government of the Kurdistan Region comply with the transparency principles of the Extractive Industries Transparency Initiative (EITI).
“A Parliamentary Committee will be established, under this Act, to develop a full revenue management regime for the Kurdistan Region,” said Minister Hawrami. “We will seek the advice of the World Bank, IMF, and the EITI as to how this can best be designed.”
The Petroleum Act establishes the general principles of the Kurdistan Region’s revenue management system, which will at all times be subject to parliamentary and public scrutiny. Revenues from all of the Region’s petroleum fields will be shared with the rest of Iraq.
The Act also empowers the Parliament to guarantee a percentage of the Kurdistan Region’s petroleum revenues for special purposes: (i) a 10% annual cash dividend to all the citizens of the Kurdistan Region; (ii) an additional dividend for people who suffered physically and psychologically under the previous regime; (iii) a percentage for a “future fund” to be invested for capital growth, and used when petroleum revenues in the Region begin to decline; (iv) special allocations for the social, cultural and governmental needs of the Kurdistan Region’s many ethnic and religious minorities; (v) and a percentage to restore and protect the Region’s natural environment.
“The Kurdistan Regional Government is committed to building an open, just, democratic and caring society”, said Minister Hawrami. “Getting the petroleum revenue, distribution and management right will be crucial in this endeavour. Let’s hope that the rest of Iraq does the same.”
The full text of the draft Kurdistan Region Petroleum Act, and explanatory memorandum, can be viewed in English and Arabic here: