Schröder’s Rosneft is in trouble with the Iraqi government

The Society for Threatened Peoples (STP) warns against an escalation of the dispute over oil from Iraqi Kurdistan. “The constitution states that Iraqi Kurdistan has the right to produce and export oil – and it is dependent on the revenues. If Baghdad denies the autonomous region this right, Iraqi Kurdistan is threatened in its existence – a disaster for the Kurds, but also for the minorities of the Christian Assyrians/Aramaeans/Chaldeans, the Yazidis, the Shabak, and the many refugees who have found shelter there,” said Kamal Sido, the STP’s Middle East consultant, in Göttingen on Wednesday.

At the beginning of this week, the Iraqi government had urged the parastatal Russian energy company Rosneft to disclose all energy contracts with the regional government. International energy companies were warned not to make any agreements with Iraqi Kurdistan without approval from Baghdad, as such contracts would be considered illegal and void.

“Now, Rosneft – with former German chancellor Gerhard Schröder as the new chairman of the supervisory board – will have to overthink its position in delicate conflict: the company is a central factor in the Iraqi government’s strategy to undermine the autonomy of the Kurdish region,” Sido stated. So far, Rosneft has refused to publicize its contracts with the regional government and have them approved by the Iraqi government. Last Monday, a spokesman said that his company was not accountable to anyone – and he emphasized that the only thing that mattered was that company was respecting the laws of the autonomous region.

In 2017, the company, which is close to the Kremlin, made advance payments of more than 3 billion USD to the regional government, in connection with oil rights and the operation of oil production facilities. Rosneft is planning to produce oil at five locations in Iraqi Kurdistan.
The escalating dispute over oil from Iraqi Kurdistan has already led to a significant increase in oil prices on the world market. For the first time in two years, the price of one barrel of crude oil reached more than 60 USD. “If the conflict continues to escalate, crude oil could become even more expensive on the world market,” warned Sido.

In the conflict over the past two weeks, Iraqi Kurdistan had lost about half of its oil production facilities (controlled since 2014) to the Iraqi army or to Shiite militias.