Open Letter on the Latest Oil Agreement with KRG

    1. Petroleum literature and information show that the Region refines ca. 220tbd and export the surpluses of refined products to the neighboring markets. The current agreement did not address this issue despite the fact that it constitute significant portion of the Region’s oil production. By not addressing this important issue we consider it as an additional reward/gift to the Region while Iraq imports petroleum products in billions of Dollars annually, and the Region takes its share from these imports just like any other part of the country.
    2. The brief announcement did not make any reference to basic differences between the Federal and Region’s governments such as: the authority over the territories that were occupied by Peshmargah since last July and the management of oil therein specifically and in the Region generally as per articles 111 and 112 of the Constitution; the oil export revenues accumulated through smuggling; ignore the strategic agreement between the Region and Turkey, among others.Moreover, the announcement was silent about the Region’s oil production beyond the mentioned volumes; will it be delivered to the Federal Government or the Region exports it for its benefit? What about the legal actions already taken against the Region, or were they forgotten or what? Needless to say that these legal actions and suspending the Region’s share in the annual budget are best negotiation leverages/strengths in the hands of the Federal Government, which should not be waived away without corresponding returns.
    3. The share of the Region in the draft budget 2014 was calculated as percentage of total expenditures not as percentage of total revenues. Since total expenditures comprises fiscal deficit, then this practically means giving the Region additional funding more than its share in total revenue. Thus, a revision is needed so that the Region share should be premised as percentage of revenues not of expenditures. Moreover, annual budgets for 2013 and 2014 obliged KRG to deliver to IFG 250tbd and 400tbd respectively, but KRG defaulted and did not deliver any volume; IFG should claim these and get reimbursement.

8 Responses to Open Letter on the Latest Oil Agreement with KRG

  1. Re da Caste 30th December 2014 at 09:58 #

    You, Ahmed, you have been supporting Malikis and Shahristanis dividing politics in Iraq leading to the war and economical disaster going on in the country and you still have the guts to criticise Abadis and Mehdis new approach in order to bring peace in Iraq! You are really a piece of garbage. But I understand it’s easy to sit in Norway and have opinions, another thing is to be there and feel ISIS bullets getting close. But I can assure you Pershmerga will fix the problems after Malikis army deserted the field, and they will also secure the oil will flow through Kurdistan region.