By Ali Al-Yasseri

Azzaman, March 31, 2012

The threat by Kurds to halt shipping their oil via national pipelines for export has prompted the Iraqi government to pay $650 to foreign firms working in their semi-independent region.

The Kurds had signed several deals with foreign firms for the development of oil fields in their autonomous region comprising the northern provinces of Arbil, Dahouk and Sulaimaniya.

Currently, the Kurdish fields produce up to 100,000 barrels a day which they have been shipping through national pipelines for exports

But the Kurds slashed their shipments by half and threatened to halt them unless the government went ahead and paid foreign oil firms working in their region.

The firms working in Iraqi Kurdistan have service deals and rely on exports to collect their expenditures and profits.

“The government has agreed to pay $650 to oil companies working in Kurdistan,” said Finance Minister Rafia al-Isawi.

The Kurds had agreed for the royalties from exporting oil originating in the Kurdish region to go to government coffers on the condition that the all foreign firm dues were covered by it.

The deal on exporting oil from the Kurdish fields solves only one of the thorny issues in the relations between the central government and the Kurdish regional government in Arbil.

The Oil Ministry says deals with foreign firms specifically aimed at developing national wealth must be approved by the central government in Baghdad.

Oil majors developing oil fields in Iraqi Kurdistan are not allowed to compete for contracts by the Oil Ministry unless submitting a declaration certifying the suspension of their activities in the Kurdish region.


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