Southern provinces may halt oil production if not given fair share of oil revenues

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By Basem al-Rikabi

Azzaman, January 24, 2014

Iraq’s southern provinces have warned that they may stop the flow of oil from fields in their region if their demand for a fair share of the country’s oil revenues is ignored,  said Hassan Toran, Governor of the southern Province of Dhi Qar.

“If the demand by southern provinces for a fair share of oil royalties is not heeded, I cannot rule out their resort to other means like halting oil production,” Toran said.

Toran said southern provinces should be treated like the Kurdish region which gets 17% of the hard cash the country earns from oil exports. The region comprises the three provinces of Dahouk, Arbil and Sulaimaniya.

“We may also deduct our fair share from oil revenues directly if our demands are not met. We need justice in the distribution of oil wealth. We should be treated like the Kurdish region,” Toran said.

Nearly 90% of Iraq’s oil output of more than three million barrels a day originates in the south where some of the world’s richest and most prolific oil wells are situated.

Toran said discussions among the southern provinces of Basra, Dhiqar and Missan were going on to formulate “a united stand” and present it to the government.

He said the country’s oil wealth – which currently brings more than $100 billion to Iraq – should be distributed in a just and fair manner.

“We should be treated in the same manner the Kurdish region is handled in terms of entitlement to oil wealth,” he added.

Toran said it was “illogical” to see the Kurdish region getting 17% of the country’s oil wealth at a time the Kurdish “contribution to the national budget is much less than that of the southern provinces.”

Under the so-called ‘petrodollar project’ oil-producing provinces are entitled to $2 per each barrel they produce but Toran said they were only getting $1 for each barrel.

He said the first step for the government would be to honor commitments under provincial rules which call for the allocation $5 per barrel to the producing provinces.