View Full Version : Baghdad and Kurdish region solve issue of payment for oil firms

02-23-2013, 04:00 PM
By Ali al-Mawsawi
Azzaman, February 23, 2013
The long-standing conflict over payments to oil firms operating in Iraqi Kurdistan has been solved, according to a senior Iraqi official.
Ibrahim al-Jaafari, who heads the pro-government national alliance, announced that the sides “have reached a legal framework to cover the payments due to foreign firms with deals with the (Kurdish) region.”
The feud of who controls oil reserves and production in Iraqi Kurdistan has been raging for over two years since the Kurds allowed oil firms to explore and extract oil in their areas.
Scores of foreign oil firms have been working in the region, illegally from Baghdad’s viewpoint, and their activities are reported to have helped the Kurds to produce up to 1 million barrels a day in a few years.
The new agreement, according to Jaafari, is conditional on Kurds shipping their oil destined for exports via Iraqi national pipelines and the royalties ending up in Iraqi national exchequer.
Payment of up to $4 billion are due and Jaafari said asking for guarantees “is legitimate” before transferring the money.
Few details of the agreement have emerged, but Jaafari said the government would make paying foreign firms in the Kurdish region a special section in the national budget.
The agreement to cover for the contracts the Kurds have signed with foreign firms gives them the leeway they have been demanding to run production operations on their own.
But the agreement by the Kurds to funnel all oil via Iraqi national pipelines with central government collecting the royalties pleases the government in Baghdad.
Earlier, the Kurds had agreed to ship up to 175,000 barrels a day via the national pipelines for export to the outside world.
But the shipments fluctuated around 100,000 to 120,000 before they were suspended over disagreement on how to pay foreign firms with deals with Iraqi Kurdish region.