Sep 5 2012

Baghdad gives Kurds seven days to settle oil revenue accounts

By Zeena Sami

Azzaman, September 5, 2012

The government has postponed a decision on reducing the Kurdish budget to compensate for the billions of dollar the Ministry of Oil says it has lost due to the suspension by Kurds of exporting oil through national pipelines.

The ministry has estimated the country to have lost more than $10 billion and has asked the cabinet to deduct the sum from the budget allocations to the Kurdish region which amount to 17% of the country’s total oil revenues.

“The decision to put off a ruling that will have required forcing the Kurds to pay for the losses incurred due to their  suspension of oil exports originating in their region is to help the sides enter into dialogue,” said Ali Dhari, a member of the energy commission at the Iraqi parliament.

Dhari said the Kurds were obliged to meet Oil Ministry’s conditions and terms and had one week to respond.

The Kurds had agreed to ship their oil to international markets via Iraqi pipelines and for the royalties to be collected by the Oil Ministry.

However, differences on paying for the foreign firms for developing oil fields in the Kurdish region and issues related to contracts prompted the Kurds to halt exports.

Iraqi Kurds enjoy a high degree of autonomy in three northern provinces: Arbil, Sulaimaniya and Dahouk.

They say developing oil fields in their region is their sole responsibility.

Baghdad says natural resources, including oil, fall within the jurisdiction of the central government in Baghdad.

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