Kirkuk threatens to halt oil exports to Baghdad
The Iraqi ministry of oil takes 50,000 barrels per day (bpd) of Kirkuk oil from the Khabaza oilfield but has failed to send to the province its portion of the budget. The Kirkuk administration has, therefore, threatened to cut Baghdad’s share of its oil and will sell crude oil to some companies to pay debts to these companies.
“Daily 50k bpd of oil from Kirkuk is sent to Baghdad and the rest of the produced oil is saved underground in the oilfields,” said Ahmed Askari head of the oil and gas committee in the Kirkuk provincial council. “Baghdad owes us about $1.3 billion from the petro dollar deal. Therefore the Kirkuk provincial council decided to give some crude oil to those companies who we owe money to.”
Exportation of Kirkuk’s oil was temporarily suspended by Baghdad, though the province still produces about 150 to 180,000 bpd.
Chief engineer at the North Oil Company Farhad Hamza said, “The oil that has been produced from the Kirkuk fields, we separate the gas from the oil and then drop the oil back into the wells. This is not a good process but we have to do so because Baghdad made a political decision and halted Kirkuk oil exports.”
Baghdad has also halted building a refinery in Kirkuk, stalling development of Kirkuk’s energy sector.
Baghdad owes Kirkuk a lot of money and this has affected the Kirkuk economy and public services. About 430 service projects are suspended in Kirkuk and the region has a pile of electricity bills it has to pay.