KRG Holds Out Over Oil Exports

Officials of the Kurdistan Regional Government pressed the central government today to recognise oil contracts that they have inked with transnational corporations, warning that they will not resume exports until it does, according to Morning Star.

The Kurdistan Regional Government (KRG), which can reportedly export 150,000 barrels a day, has signed 37 contracts for oil exploration and production with 40 transnational firms since the US-led invasion toppled the Ba’athist regime in 2003.

Those production sharing agreements, which entitle the companies to a share in the oil extracted, are deemed illegal by Baghdad.

Article 11 of the Iraqi Constitution states that the country’s oil and gas belongs collectively to all Iraqi citizens, regardless of their religious background or in which region they live.

Iraq’s newly appointed Oil Minister, Abdul-Karim Luaibi [Elaibi], has declared that the KRG can sell oil to the outside world – but only through the national export network, with revenues going to the government budget.

Kurdish Ministry of Natural Resources adviser Ali Hussein Balo said that was not possible because “We are committed to the companies we have signed contracts with to have a share in the produced oil.

“Baghdad wants everything free of charge,” Mr Balo complained.

He said that the KRG will only start exporting if all “our deals are recognised officially in a signed paper by Baghdad.”

Iraq’s new oil minister last week declared the dispute over how private companies accounted for equipment costs and other expenses for reimbursement has been settled, clearing the way for the exports to resume.

He said Baghdad would receive all the oil produced for export and would pay only the costs incurred by the developers.

The KRG started exporting oil for the first time on June 1 2009, despite protests from Baghdad. The exports were suspended in October of the same year in a dispute over payments.

Oil revenues account for nearly 95 per cent of Iraq’s budget.

(Source: Morning Star, Associated Press)

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