Abadi not willing to pay Kurdistan’s budget in full
Iraqi Prime Minister Haider al Abadi is not willing to pay Kurdistan this month’s budget equal to the amount of oil Erbil has exported.
Reports also indicate that there are differences between Prime Minister Abadi and the Iraqi Ministry of Oil regarding this issue.
According to reports Kurdistan Region’s records show that they have delivered 16,300,000 barrels of oil to the Iraqi State Oil Marketing Organization SOMO at the Ceyhan Port in Turkey; however SOMO claim that they have only received 15,300,000 barrels.
This issue has reportedly resulted in a disagreement between Erbil and Baghdad.
Another issue is that the Iraqi government reportedly doesn’t want to count the Kirkuk oil Kurdistan Region exports in the calculations of payments to Erbil, while according to the December 2014 oil deal between the central and regional governments Kurdistan is obliged to ex- port 250k bpd of its own oil and 300b bpd of Kirkuk oil through its independent pipelines.
These issues have created disagreements between PM Abadi and the Oil Ministry on the way of sending Kurdistan’s budget.
KRG, on the other hands, argues that based on the amount of exports in April, Baghdad has to send US$850 million, which Baghdad doesn’t agree to comply with.
As SOMO’s reports state that they have received 15,300k bpd from Kurdistan, Iraqi Oil Ministry asked Abadi to approve transfer of US$625 million to Erbil, however, Abadi has not agreed with this either and has only approved US$543 million, which has been rejected by the KRG.
Some sources also argue that there is yet another point of disagreement between Erbil and Baghdad, which is the oil price estimate to be used for calculating Kurdistan’s budget.
Kurdistan Region is reportedly asking the estimation to be based on US$ 56 per barrel, while central government insists on estimating on US$51 per barrel.
During April average oil prices were US$58 per barrel and are currently around US$65 per barrel.