Kurds and Baghdad in Row over Oil Smuggling

Iraqi oil officials and their Kurdish counterparts have exchanged accusations of smuggling large volumes of crude oil and by-products to neighboring Iran.

There are two oil ministers in Iraq. Heading the Oil Ministry in Baghdad is Husain al-Shahristani.

The semi-independent Kurdish region has its own government with Ashti Horami [Ashti Hawrami] heading the Ministry of Natural Resources, i.e. oil.

There are big differences between the two ministries and governments on how to deal with Iraq’s almost sole source of hard cash – oil.

The ministry in Baghdad says oil exploring, excavating, refining and exporting activities fall within its jurisdiction. The Kurdish regional government disputes that and has developed several oil fields by signing contracts with foreign firms.

Baghdad says the Kurds export the crude they produce in their fields to Iran, the shipments which its sees as illegal.

Horami, the Kurdish regional minister in charge of oil, denies the accusation of exporting crude oil, but admits ferrying unspecified quantities of by-products.

The Kurdish official charged that the government in Baghdad was involved in the smuggling of up to 100,000 barrels of crude oil a day to Iran from its southern fields in Basra

Accusations that the Kurds are involved in oil smuggling operations first surfaced in the Kurdish region.

A senior Kurdish opposition official of the Kurdish Change Party said the ruling Kurdish factions of Massoud Barzani, head of the Kurdish region and Jalal Talabani, the Iraqi president, were involved in the smuggling.

The official Azad Jalak said the revenues end up in the coffers of Barzani and Talabani’s factions and military wings.

Horami, the Kurdish minister, said the money goes to regional government coffers.

(Britain's Sunday Times reported that Mr Horami invested in Heritage Oil after he gave it a contract to begin exploration work, and that he sold the shares after Heritage found oil in March 2009).

(Sources: Azzaman, Sunday Times)

(Photo: Ashti Hawrami, Minister of Natural Resources)

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