Con­tro­ver­sial oil and budget is­sues still un­solved

KRG del­e­ga­tion led by PM Barzani held a meet­ing with Iraqi of­fi­cials to dis­cuss oil and budget is­sues. Iraqi govern­ment warns Er­bil that the KRG’s share will be cut and PM Ma­liki says “Let Kur­dis­tan people rise against the KRG”. Po­lit­i­cal an­a­lysts be­lieve

The Kurdish Globe - - FRONT PAGE - By Salih Wal­ad­bagi

The Kur­dis­tan Re­gional Govern­ment (KRG) and the Iraqi federal govern­ment have yet to reach an agree­ment over pend­ing dis­putes which in­clude oil and budget is­sues.

At their re­cent meet­ing, Er­bil and Bagh­dad failed to make progress to­wards re­solv­ing the long-term prob­lems.

Bagh­dad stresses that the KRG can­not ex­port its oil through a pipe­line to Turkey, while hun­dreds of thou­sands of bar­rels of Kur­dis­tani oil is stuck in the Turk­ish port of Cey­han. It can­not be sold with­out Bagh­dad’s per­mis­sion.

The Iraqi govern­ment and the KRG promised to keep ne­go­ti­a­tions on­go­ing un­til a con­vinc­ing so­lu­tion is found.

The Iraqi Prime Min­is­ter’s of­fice in Bagh­dad is­sued a state­ment say­ing that: “Pre­mier Nuri al-Ma­liki and KRG Prime Min­is­ter Nechir­van Barzani stressed the sig­nif­i­cance of reach­ing an agree­ment over the ma­jor is­sues be­tween the Kur­dis­tan Re­gion and Iraq.”

PM Barzani headed a Kur­dish del­e­ga­tion to Bagh­dad to dis­cuss and find so­lu­tions re­lat­ing to the con­tro­ver­sial oil ex­ports and Kur­dis­tan’s blocked share of the na­tional budget.

PM Barzani had vis­ited neigh­bor­ing Turkey a few days be­fore vis­it­ing Bagh­dad and met with Turk­ish Prime Min­is­ter Re­cep Tayyip Er­do­gan in Is­tan­bul.

At the meet­ing, Er­do­gan reaf­firmed the Turk­ish govern­ment’s com­mit­ment to the en­ergy con- tracts signed be­tween the KRG and his govern­ment last year.

PM Barzani vis­ited Bagh­dad and Is­tan­bul in a new ef­fort to progress to­wards an agree­ment, but he did not suc­ceed.

The Iraqi govern­ment is in­sist­ing that Kur­dish crude be ex­ported via Iraq’s State Oil Mar­ket­ing Or­ga­ni­za­tion (SOMO), but the KRG has thus far re­jected the Iraqi of­fer.

Bagh­dad says that ex­port­ing oil through a pipe­line to Turkey is in vi­o­la­tion of Iraq’s con­sti­tu­tion. How­ever, the KRG strongly de­nies this claim and says the federal govern­ment has in­ter­preted the con­sti­tu­tional ar­ti­cles in a way which fur­thers its own in­ter­ests.

Fol­low­ing the Er­bil-Bagh­dad meet­ings, Deputy to Pre­mier Ma­liki for En­ergy Af­fairs, Hus­sein Shahris­tani, said the KRG had agreed to ex­port its own oil through SOMO. How­ever, Kur­dish of­fi­cials later de­nied this.

PM Ma­liki said the KRG has only one choice when it comes to ex­port­ing its oil, and that this would be pos­si­ble when an agree­ment is reached by the two sides.

Wash­ing­ton sup­ports Bagh­dad be­cause the Obama ad­min­is­tra­tion fears that the en­ergy deals be­tween the KRG and Turkey could in­crease the risk of a di­vided Iraq.

The Iraqi govern­ment says oil rev­enues have to go through Bagh­dad in ac­cor­dance with the coun­try’s con­sti­tu­tion, re­gard­less of where the re­serves are lo­cated. Bagh­dad stated that it will al­lo­cate 17% of to­tal rev­enues to the au­ton­o­mous Kur­dis­tan Re­gion of north­ern Iraq.

At the same time, the Turk­ish me­dia re­ported that the first batch of Kur­dis­tan oil (worth $ 90 mil­lion) had been sold in Sin­ga­pore. While Turk­ish En­ergy Min­is­ter, Taner Yildiz, de­nied the claims, he con­firmed that 425, 000 bar­rels of oil had been re­ceived in Turkey through the pipe­line, adding that none would be sold with­out Bagh­dad’s per­mis­sion.

Bagh­dad has warned for­eign com­pa­nies not to pur­chase Kur­dish oil in Turkey, threat­en­ing to take le­gal ac­tion against any that do. Budget dis­putes Iraqi of­fi­cials have threat­ened to cut the KRG’s share of the na­tional budget. The Kur­dish of­fi­cials have de­scribed the threat as a po­lit­i­cal pun­ish­ment.

Iraq’s Kur­dish deputy fi­nance min­is­ter, Fad­hil Nabi, told Kur­dish me­dia that PM Ma­liki and his deputy for en­ergy af­fairs had is­sued an or­der to cut the KRG’s share, given that the KRG wants to uni­lat­er­ally ex­port oil to the in­ter­na­tional oil mar­ket.

He said that he would have to sub­mit his res­ig­na­tion if the Iraqi govern­ment did not re­verse its de­ci­sion to cut Kur­dis­tan’s share.

How­ever, the de­ci­sion has caused se­vere fi­nan­cial prob­lems for the KRG and those work­ing in its pub­lic sec­tor. It has also led to a lack of bank liq­uid­ity.

Ac­cord­ing to Nabi, PM Ma­liki said “Stop the KRG’s share and let the people rise against the Kur­dish govern­ment”.

A Kur­dish mem­ber of par­lia­ment in Bagh­dad, Dler Ab­dulqadir, says the lack of money in the banks is a po­lit­i­cal pun­ish­ment and that the Iraqi govern­ment is re­spon­si­ble for this. An­a­lysts de­scribe the move as a “mass pun­ish­ment of Kur­dis­tani res­i­dents”.

Ab­dulqadir said that if the KRG had an in­de­pen­dent cen­tral bank and in­de­pen­dent rev­enue, it could save money in its own banks and pay the salary of its em­ploy­ees.

Since the be­gin­ning of the year, pub­lic sec­tor work­ers have not re­ceived their salaries on a reg­u­lar ba­sis.

They have been strongly crit­i­cal of both the KRG and the Iraqi govern­ment be­cause they think the two gov­ern­ments are us­ing their salaries to play a po­lit­i­cal game. Suleiman Ahmed, a KRG em­ployee, says that he can­not af­ford his daily ne­ces­si­ties due to the de­layed pay­ment of his salary. He said the sit­u­a­tion has had a neg­a­tive psy­cho­log­i­cal im­pact on his fam­ily.

He also said that if the sit­u­a­tion goes on like this, it would be­come in­tol­er­a­ble be­cause people need money to ar­range their daily ac­tiv­i­ties.

A po­lit­i­cal an­a­lyst who wished to re­main anony­mous said that if Bagh­dad wants to cut the KRG’s share then the Kur­dish govern­ment should use its own cards to put pres­sure on Bagh­dad. He stated that the KRG could, for ex­am­ple, stop oil from Kirkuk reach­ing Cey­han, given that the pipe­line goes through Kur­dis­tan.

Ali Hama Salih, a Change Move­ment MP in the Kur­dis­tan Par­lia­ment, posted a sta­tus on his of­fi­cial Face­book page say­ing that Er­bil and Bagh­dad might reach an agree­ment over oil and the budget soon.

He fur­ther stated that Bagh­dad is ready ei­ther to dis­solve SOMO or to amend it such a way that the KRG can have its own share in the na­tional oil com­pany. In ad­di­tion, the com­pany should mon­i­tor oil ex­ports for both Bagh­dad and Er­bil.

“Iraq’s na­tional oil com­pany (SOMO or any other com­pany) should sell oil and de­posit its rev­enue in Iraq’s De­vel­op­ment Fund in Amer­ica.”

He also added that Bagh­dad is not ready to pay the for­eign oil com­pa­nies op­er­at­ing in the Kur­dis­tan Re­gion, while Bagh­dad says that the KRG dam­aged the coun­try’s budget last year be­cause it should have ex­ported 250, 000 bar­rels of oil per day. They have not yet reached an agree­ment over this point.

The KRG says it wants 17% of its own oil rev­enue de­posited in Er­bil’s cen­tral bank, while the Iraqi govern­ment says it has to pay 5% of its to­tal rev­enue in com­pen­sa­tion for the Iraq-Kuwait war of 1990.

The Kur­dis­tan Re­gional Govern­ment (KRG) and the Iraqi federal govern­ment have yet to reach an agree­ment over pend­ing dis­putes which in­clude oil and budget is­sues.

Newspapers in English

Newspapers from Iraq

© PressReader. All rights reserved.