He added, “This pipeline feeds the Baiji oil refinery.”
Although the federal government’s control of Kirkuk will halt many oil-smuggling operations and exportations that do not have the federal government’s approval, this step puts into question the future of oil contracts that the KRG signed with international companies. Those include Iraqi Kurdistan’s contract with the Russian Rosneft Oil Company, signed a few days before the Kirkuk incidents to drill oil in five different locations in Iraqi Kurdistan. As per this agreement, the KRG got $2 billion to curb its budgetary deficit.
Majida al-Tamimi, who is a member of the Iraqi parliament’s fiscal committee, told Al-Monitor, “Any contract that does not go through the parliament or that is signed without the knowledge of the federal government is illegitimate.”
She said, “The Kurdistan Region receives a yearly share of 17% from the federal budget. The federal government will not bear the burden of any loans or debts that Iraqi Kurdistan owes. If the federal government approves the contracts, the parliament would then examine them and conduct feasibility studies before taking a decision.”
Tamimi said, “In the 2018 budget, the Kurdistan Region’s name was replaced for the first time in budget charts with the name 'northern provinces,' indicating that the parliament and government are politically willing to take away as many privileges as possible from the Kurdistan Region, including oil exportation.”
Although many expected Kirkuk to be a bloody battlefield, the federal government’s takeover was smooth. Therefore, oil production will be more competent and prolific. The government is bent on developing facilities and has promised to distribute oil revenues fairly among citizens, including the Kurds in Iraqi Kurdistan. The government asserted that it would pay the Kurdistan Region’s employees’ salaries if it takes control of all the oil fields.
Oil wealth is past the danger stage of causing a war. Eyes are now set on the way the federal government will distribute oil wealth and whether it will indeed be fair to all Iraqis.
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