Nov 4 2013
By Fareed Hassan
Azzaman, November 4, 2013
If Kurds go ahead with plans to export oil on their own, the government will reduce their share from oil royalties, the powerful Energy and Oil Commission at the Iraqi parliament said.
International media reports have quoted senior Iraqi Kurdish officials as saying that they were constructing a new pipeline to carry their crude to Turkish export terminals on the Mediterranean.
The Kurds have their own regional government administering the three northern provinces of Dahouk, Arbil and Sulaimaniya.
Oil output from Kurdish fields is currently estimated at 200,000 barrels a day but Kurdish officials claim it could reach 400,000 by the end of the year. Domestic needs for the three Kurdish provinces are put at 100,000 barrels per day.
“If the (Kurdish) regional government proceeds ahead with this step, it will be violating the laws and regulations that bind it to the federal government in (Baghdad),” said Suzan al-Saad, the commission’s head.
“No such step should be taken without coordination and approval from the federal Ministry of Oil because oil is part of national wealth,” she added.
Saad said oil was the backbone of Iraqi economy and provinces or regions were not allowed constitutionally to export the commodity on their own and stash away the revenues.
Currently, the Kurds rely on the central government in Baghdad for allocations that make up the lion’s share of their regional budget.
Baghdad earmarks 17% of the country’s oil revenues to the Kurdish region, which is also legally permitted to raise revenues from income tax and tariffs.
Saad said when Kurds export oil and funnel the royalties to their own treasury this means a reduction in the country’s national budget.
“Issues related to oil out and exports are a prerogative of the central government,” she said.
She reiterated that the Kurds will lose part of the percentage of oil revenues allocated to their region in proportion to the monies they raise from oil exports.
“The central government is under obligation to retrieve all the revenues the Kurds have collected from oil exports and sales,” she said, adding that the parliament was keen to avoid confrontation with the Kurdish region.
However, she said, failure on the Kurdish part not to allow the Oil Ministry shoulder the responsibility of oil exports and revues originating in their region, will automatically lead to a slash in their allocations from the national budget.