KRG adamant about oil and government income sharing

The Kurdistan Regional Government (KRG) which controls the three northern Iraqi provinces of Dohuk, Erbil and Sulaimaniyah remains adamant it will continue to export crude oil independently despite objections from Iraq’s central government.

The future of the KRG oil and gas industry will be one of the main topics addressed at MEED’s third annual Kuwait Projects conference which opens in the Rotana Hotel in Erbil on Sunday (

Speaking at the Kurdistan regional parliament in Erbil on 4 June, caretaker KRG Prime Minister Nechirvan Barzani denied Kurdish oil exports were a prelude to seeking independence from Iraq. He said that Baghdad was to blame for the row over independent oil exports of oil produced in Iraqi Kurdistan.

“We don’t see this (oil exports) as a way for the independence of Kurdistan…” Barzani is reported as saying in answers to question from MPs. “We want to implement our constitutional rights within Iraq.”

A pipeline allowing Kurdish oil to be delivered to the Turkish port of Ceyhan was completed in December 2013. The first deliveries to Ceyhan started on 23 May. The first tanker of Kurdish oil set sail from Ceyhan at the end of last month.

The destination of the oil is not known and it has not yet been unloaded. Observers say this suggests there are problems with contracts for Kurdish oil. The government of Iraq says the oil sales are illegal. The US says it opposes Kurdish energy exports without Iraqi government approval.

Speaking to the Kurdistan regional parliament on 4 June, Barzani rejected objections to direct Kurdish oil sales “We are absolutely confident about what we have done, which is in the interest of the people of Kurdistan and the framework of the Iraqi constitution,” he said.

“If they (Baghdad) had reached an agreement with us on the distribution of oil revenues, which is the most important law for Iraq, many problems would have been resolved,” he said. The KRG has rejected demands by the central government that the sales should be conducted by the State Oil Marketing Organization (SOMO). It wants SOMO only to be an observer.

Barzani said the KRG is entitled to 17 per cent of Iraq’s national budget. He said Baghdad has failed to consistently deliver more than 10 per cent. Barzani said that the KRG needed $41bn to finance investment in infrastructure.

Barzani said the KRG signed a 50-year agreement with Turkey for the export of Kurdish oil in Istanbul on 4 June.

“The protocol with Turkey is not to divide Iraq, but to get our own 17 per cent of the budget,” Barzani said.

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