Kurdistan to increase oil production as federal government agrees to pay Iraq's dues
31/03/2012 13:27 BAGHDAD, March 31 (AKnews) - The Kurdistan Region is set to increase its oil production to 100,000 barrels per day (bpd) after the federal government decided to pay Iraq's dues to the foreign companies operating in the region.
Furat al-Sharei from the Oil and Energy Commission in the Iraqi Council of Representatives said today that the Erbil government will urge the oil companies operating in the Kurdistan Region to raise their production according to the agreement signed with the Iraqi government after Baghdad pays its dues.
"The commission is working to end the disputes between Erbil and Baghdad legally in order to organize the export of oil during the next phase in which Iraq seeks to export three million barrels per day," said al-Sharei.
Iraq's Finance Minister Rafi al-Issawi said in a press conference on the sidelines of the Arab summit in Baghdad that the Iraqi government allocated 650bn IQD ($558m) within the 2012 budget to pay the oil companies operating in the Kurdistan Region.
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 barrels per day, 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.