Turkey is ‘obliged’ not to sell oil originating in Kurdish north

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Azzaman, May 13, 2014

Iraq has asked Turkey to abide by a 2010 agreement which obliges it not to deliver any quantities of oil it receives from the Kurdish north to Baghdad, the Ministry of Oil said.

The ministry’s spokesperson, Isam Jihad, said Iraq and Turkey have an agreement which specifically forbids Turkey from exporting oil on behalf of the Kurdish regional government in the north.

“The pact includes a clear statement that the responsibility of exporting oil falls within the jurisdiction of SOMON,” Jihad said.

SOMO is Iraq’s oil export arm and Jihad said the state-owned firm is the only authority to decide on volumes of exports, prices and markets.

He said the government negotiating team has clarified the point to Kurdish authorities in meetings held to defuse crisis over oil development and exports with the Kurdish autonomous region.

Jihad said the persistence by Kurds not to surrender their oil output to SOMO has cost the Iraqi treasury up to $9 billion.

He said 2013 budget was based on the fact that the Kurdish region will supply SOMO with 250,000 barrels of oil a day, while 2014 budget stipulates that the Kurds increase the volume to 400,000 barrels a day.

However, he said, the Kurds have rejected placing their oil exports under SOMO’s control.

The Kurds get 17% of oil revenues Iraq earns from its oil exports. However, they want the percentage to be kept as it is and control their own exports.

Iraq has warned that in the event the Kurds did not allow SOMO to handle oil exports originating in their region, they will risk a drastic slash in their share of national oil revenues.

Already, the government has stopped transferring funds to Kurds, making it extremely difficult for the Kurdish authorities to pay their civil servants.

Many Iraqi deputies are openly calling on the government to reduce the Kurdish share of national oil revenues anyway because 17% is much higher in proportion to the population of the Kurdish region, which is estimated at 12% of the country total population.