Iraqi Federal Government Plans To Lower Kurdish Oil Payouts

Article Summary
Hussein Ali Daoud reports that the Baghdad-based Iraqi government plans to lower the Kurdish share of oil revenues within months. Kurdish officials say this action is political and illegal, while officials from the Ministry of Oil accuse the Kurds of independently selling oil and taking a larger share than they should.

The Ministry of Oil in the Baghdad-based Iraqi central government and the Ministry of Natural resources in the Kurdistan Regional Government (KRG) exchanged accusations with each other after information was released that the KRG will receive a reduced share of oil derivatives.

For its part, the oil ministry once again accused the KRG of abstaining from paying its dues and exporting a daily amount of 175,000 barrels of oil since last April.

In response to a statement issued by the oil ministry in Baghdad yesterday [July 2, 2012], the KRG Ministry of Natural Resources issued a statement of its own which said: "We have repeatedly said that we are not selling crude oil in the region in any way, and we reiterate that we will not do so in any form. This crude oil, which they say we are selling, is being sent to some local refineries to compensate for the share that the government is deducting from us.”

The statement continued, "the daily share has been reduced from 32,116 barrels to 16,826 barrels, and we were told during a formal meeting that this was due to political reasons.”

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In an earlier statement on July 1, the Ministry of Oil denied "reports indicating that the KRG's share of oil derivatives will be cut off or reduced,” saying that such reports are “completely false.” The ministry added, "The ministry's plan is based on the calculation of the refineries' production as well as on the quantities produced in all provinces, including the Kurdistan region. However, officials there are asking for 17% of the oil refined in the central and southern refineries, as well as for keeping the quantities produced in the region's refineries. The ministry deems such distribution as unfair and contrary to moral principles.”

The oil ministry statement reiterated its call on all provinces and territories to deliver their produced crude oil to the Ministry of Oil, represented by the company SOMO. It also accused the KRG of not "paying the financial resources required for delivering 175,000 barrels per day since last April and selling produced crude oil at low prices.”

Qasim Mashkhati, an MP from the Kurdistan Alliance bloc, said that the federal government will reduce the KRG’s share of oil derivatives within months. In a statement to Al-Hayat he said, "Deputy Prime Minister for Energy Hussain al-Shahristani is revealing his personal and aggressive attitude toward the Kurds while he makes unconstitutional and illegal decisions.”

"The actions taken by the political blocs, including the Kurdistan Alliance, to withdraw confidence from Prime Minister Nouri al-Maliki are behind the recent decisions from the Ministry of Oil, thus these decisions are political and non-professional,” he added.

Mashkhati pointed out that "KRG president Massoud Barzani's call to form a joint committee tasked with examining the oil-smuggling accusations against the KRG was met with neglect by the federal government. Instead, the federal government began to adopt a policy of marginalization against the Kurdish people and decided to reduce the Kurdistan region's share of oil derivatives.”

Mashkhati revealed that some parliamentary blocs are taking actions to approve the oil and gas draft law, which is based on the 2007 draft. However, he pointed out that "the government does not want to approve this draft despite the fact that it was the government that submitted the draft to parliament five years ago. The government is seeking to submit a new draft that contradicts the 2007 draft, but many political blocs reject this.”

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Found in: natural resources ministry, oil ministry, oil, nouri al-maliki, kurdish oil, krg, iraqi oil
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