Kurdish Studies

ISSN: 2051-4883 | e-ISSN: 2051-4891

Legal complications of stabilization provisions in Iraqi Kurdistan production-sharing contracts

Rdhwan Shareef Salih
Soran University
Keywords: Freezing provisions, economic balancing/equilibrium provisions, hybrid-stabilization provisions, the Kurdistan Regional Government, production-sharing contracts.


During the period of long-term petroleum contracts, host states may attempt to amend the contractual regulation or even to annul contracts by changing their domestic laws, especially in developing countries. Therefore, to restrict the legislative or administrative power of the host States, the contractors would want the petroleum contracts to contain stabilization provisions. These provisions have been included in production-sharing contracts (PSCs) of the Kurdistan Regional Government (KRG). This study aims to critically analyse stabilization provisions of the KRG’s PSCs in order to ascertain their legal complications when compared to the provisions of several oil-producing countries’ PSCs. Thus, the study poses this question: what are the main legal complications of stabilization provisions of the KRG’s PSCs? The study has clarified that most PSCs of the KRG have adopted full hybrid-stabilization provisions and a few of them have adopted limited hybrid-stabilization provisions that have been drafted very widely and are one of the main legal complications of the KRG’s PSCs. Finally, it is suggested that the KRG push back on widely drafted stabilization provisions and adopt limited stability provisions or attempt to extricate PSCs from these provisions.

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