October 14, 2009
Iraqi Kurdistan halts crude exports
The autonomous Iraqi Kurdistan has halted oil exports over a payment dispute with Baghdad, saying the central government must first pay the foreign companies in there.
“Oil exports from Kurdistan’s fields have been stopped until an agreement is reached with the Iraqi oil ministry for mechanisms to pay the dues of the oil companies working in the region,” Natural Resources Minister Ashti al-Hawrami said on Wednesday.
In a letter released by the regional government’s website, Hawrami said that Norway’s DNO and Turkey’s Genel Enerji had not been paid for their exports because the oil sale revenues went directly to Baghdad.
But Iraq’s Oil Ministry insisted it would only pay Kurdistan its 17 percent share of central government revenues, arguing the contracts with the firms operating in the northern region had not approved by Baghdad.
“The Iraqi government and the ministry did not sign any contracts with these companies and have not seen the details of the contracts agreed by the region,” a senior Baghdad official told AFP on condition of anonymity.
Under an agreement with the region’s authorities, the gains from Kurdistan’s oil exports are deposited in the central government budget and the region gets its share of the central budget, he added.
Spokesman Assem Jihad also said the oil ministry’s responsibility was to ‘export Iraqi oil … and then deposit the revenues with the central government’.
The oil ministry and Iraqi Kurdistan disagree on how to pay the international companies involved in extracting oil in the region.
Baghdad allowed Iraqi Kurdistan in May to export oil extracted by the companies which had signed deals in the regional capital Arbil, but the two remain at loggerheads over Kurdish officials’ signing of their own contracts with foreign firms.
The energy-rich Iraq lies on the world’s third largest proven reserves of oil, following the Middle East powerhouse Saudi Arabia and Iran.