Baghdad, 07 May 2010 – AFP
An oil dispute between Iraq and the autonomous northern region of Kurdistan has been resolved, the central government’s oil minister said in Baghdad on Thursday.
“We reached an agreement with the Kurds that all revenues will be handed over to SOMO and the Iraqi government will be responsible for paying the extraction expenses in Kurdistan,” Hussein al-Shahristani told reporters.
SOMO is Iraq’s State Oil Marketing Organisation which deals with sales of crude and other petroleum-based products.
Iraqi Kurdistan halted oil exports in October last year due to a payment dispute with Baghdad.
The two sides previously clashed over how oil revenues should be distributed and Kurdish authorities had said they would not resume crude exports until Baghdad paid the foreign energy companies which are pumping the oil.
The central government had repeatedly said it was opposed to the Kurds signing their own contracts, a position which Kurdish officials disregarded by making dozens of agreements with foreign firms.
With an estimated 115 billion barrels, Iraq has the world’s third largest proven oil reserves behind only Saudi Arabia and Iran. Its oil revenues account for around 85 percent of government income.
Since November, Baghdad has signed contracts with foreign firms to develop 10 oil fields around the country, with the aim of raising its output, currently at 2.4 million bpd, to between 10 and 12 million bpd.