02 April 2012
BAGHDAD - The Kurdistan Regional Government (KRG) did not fulfill its obligations to the federal government with regard to oil exports, said Iraq's Deputy Prime Minister for Energy Affairs today.
Iraq's Oil Minister added that oil giant Exxon Mobil decided to freeze its contracts in the Kurdistan Region and will participate in the fourth licensing round.
Deputy PM Hussain Shahristani said at a news conference that the KRG did not comply with its obligations to the federal government to export 175,000 barrels per day (bpd).
"The losses on Iraq because of the lack of delivery of imports of oil produced in Kurdistan reached $3.45bn (4tr IQD). The Iraqi federal government will not allow the implementation of projects without its consent because oil belongs to all Iraqis, and doesn't belong to a certain province or territory.
"The Kurdistan Region can't stop the export of oil indefinitely because it's contrary to the constitution and affects the state budget and the Iraqi economy."
Kurdistan's Ministry of Natural Resources announced yesterday about suspending all exports of oil from the region until further notice because the federal government did not pay the dues of foreign oil companies operating in the region.
The Iraqi government agreed on March 28 this year to pay $558m (650bn IQD) as dues for oil companies operating in the region, while the Ministry of Finance announced the allocation of more than $2bn (2.3tr IQD) within the 2012 budget to pay for all oil companies operating in Iraq.
"The Kurdistan Region did not provide oil produced in the region during the years 2010 and 2011 and this caused a deficit in the budget," added Shahristani.
"The value of oil produced in 2011 reached $3.5bn (4.1tr IQD), while the value of oil produced in 2010 reached $2.1bn (2.4tr IQD). That is equal to $5.6bn (6.5tr IQD) within two years, as well as the production of other years. Such amounts exceed the amounts that the region is demanding."
Shahristani continued to say that the Kurdistan Region gets 17 percent of Iraq's general budget but only provides five percent or less of the oil produced in the region to Iraq.
Iraqi Oil Minister Abdul Karim Luaibi meanwhile said that "the region's oil sales that were not submitted to the government reached five times the value of the receivables it is demanding.
"Exxon Mobil decided to freeze its contracts in the Kurdistan Region and was returned to participate in the fourth round of licensing. We will not allow any company that deals with the KRG to implement oil projects in other provinces because it is a violation of the constitution."
Luaibi called on the KRG to adopt a strategy of coordination with the federal government, adding that Iraq's oil wealth belongs to all Iraqis, according to the constitution.
The Kurdistan Regional Government (KRG) threatened the federal government on March 26 of stopping its oil exports if Baghdad did not pay the dues of the production companies in the region.
"The Ministry of Natural Resources has decided to reduce the exports to 50,000 bpd, warning that it will stop completely the production within a month in the absence of payments," the KRG said at the time.
The Iraqi Oil Ministry warned the Kurdistan Region on March 13 about major losses in the state treasury due to the region's decreasing exports. The ministry pointed out that the region was exporting 65,000 bpd and asked it to fulfill its commitment to export 175,000 bpd in line with the 2012 budget.
The Deputy Prime Minister for Energy Affairs Hussain al-Shahristani revealed in September last year about the decline in crude oil exports from the Kurdistan Region from 150,000 bpd to 50,000 through the Iraqi-Turkish tube.
Al-Shahristani demanded the contracts in the region to be transparent and not "behind closed doors", stating that the contracts were not submitted to the central government.
The Iraqi Oil Ministry announced on January 18 this year about a plan to increase its oil production during the current year to 3,400,000 bpd and to increase its oil exports to 2,600,000 bpd.
Iraq exports its crude oil from the ports of Basra and Khor al-Amaya in the Arabian Gulf, as well as the Turkish port of Ceyhan on the Mediterranean. The proportion of oil exports from Basra is 90 percent of the total exports, while the remaining amount is exported from Kirkuk.
Iraq currently produces about three million barrels of crude oil per day and exports approximately 2,200,000 bpd.
BAGHDAD - The Kurdistan Regional Government (KRG) did not fulfill its obligations to the federal government with regard to oil exports, said Iraq's Deputy Prime Minister for Energy Affairs today.
Iraq's Oil Minister added that oil giant Exxon Mobil decided to freeze its contracts in the Kurdistan Region and will participate in the fourth licensing round.
Deputy PM Hussain Shahristani said at a news conference that the KRG did not comply with its obligations to the federal government to export 175,000 barrels per day (bpd).
"The losses on Iraq because of the lack of delivery of imports of oil produced in Kurdistan reached $3.45bn (4tr IQD). The Iraqi federal government will not allow the implementation of projects without its consent because oil belongs to all Iraqis, and doesn't belong to a certain province or territory.
"The Kurdistan Region can't stop the export of oil indefinitely because it's contrary to the constitution and affects the state budget and the Iraqi economy."
Kurdistan's Ministry of Natural Resources announced yesterday about suspending all exports of oil from the region until further notice because the federal government did not pay the dues of foreign oil companies operating in the region.
The Iraqi government agreed on March 28 this year to pay $558m (650bn IQD) as dues for oil companies operating in the region, while the Ministry of Finance announced the allocation of more than $2bn (2.3tr IQD) within the 2012 budget to pay for all oil companies operating in Iraq.
"The Kurdistan Region did not provide oil produced in the region during the years 2010 and 2011 and this caused a deficit in the budget," added Shahristani.
"The value of oil produced in 2011 reached $3.5bn (4.1tr IQD), while the value of oil produced in 2010 reached $2.1bn (2.4tr IQD). That is equal to $5.6bn (6.5tr IQD) within two years, as well as the production of other years. Such amounts exceed the amounts that the region is demanding."
Shahristani continued to say that the Kurdistan Region gets 17 percent of Iraq's general budget but only provides five percent or less of the oil produced in the region to Iraq.
Iraqi Oil Minister Abdul Karim Luaibi meanwhile said that "the region's oil sales that were not submitted to the government reached five times the value of the receivables it is demanding.
"Exxon Mobil decided to freeze its contracts in the Kurdistan Region and was returned to participate in the fourth round of licensing. We will not allow any company that deals with the KRG to implement oil projects in other provinces because it is a violation of the constitution."
Luaibi called on the KRG to adopt a strategy of coordination with the federal government, adding that Iraq's oil wealth belongs to all Iraqis, according to the constitution.
The Kurdistan Regional Government (KRG) threatened the federal government on March 26 of stopping its oil exports if Baghdad did not pay the dues of the production companies in the region.
"The Ministry of Natural Resources has decided to reduce the exports to 50,000 bpd, warning that it will stop completely the production within a month in the absence of payments," the KRG said at the time.
The Iraqi Oil Ministry warned the Kurdistan Region on March 13 about major losses in the state treasury due to the region's decreasing exports. The ministry pointed out that the region was exporting 65,000 bpd and asked it to fulfill its commitment to export 175,000 bpd in line with the 2012 budget.
The Deputy Prime Minister for Energy Affairs Hussain al-Shahristani revealed in September last year about the decline in crude oil exports from the Kurdistan Region from 150,000 bpd to 50,000 through the Iraqi-Turkish tube.
Al-Shahristani demanded the contracts in the region to be transparent and not "behind closed doors", stating that the contracts were not submitted to the central government.
The Iraqi Oil Ministry announced on January 18 this year about a plan to increase its oil production during the current year to 3,400,000 bpd and to increase its oil exports to 2,600,000 bpd.
Iraq exports its crude oil from the ports of Basra and Khor al-Amaya in the Arabian Gulf, as well as the Turkish port of Ceyhan on the Mediterranean. The proportion of oil exports from Basra is 90 percent of the total exports, while the remaining amount is exported from Kirkuk.
Iraq currently produces about three million barrels of crude oil per day and exports approximately 2,200,000 bpd.
© AK News 2012
