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Business

Baghdad won't honor KRG payment deals with int'l oil companies: report

By Rudaw 9/2/2018
An employee works at an oil facility in the Kurdistan Region. Photo: Rudaw file
An employee works at an oil facility in the Kurdistan Region. Photo: Rudaw file
ERBIL, Kurdistan Region – The Iraqi government will not cover the gross payments due to oil companies that have signed agreements with the Kurdistan Region, but will require new contracts signed with the central government.

“Baghdad will not be committed to cover the gross payments to foreign companies that have agreements with the Kurdistan Region for investment in the Kurdistan Region oilfields,” Iraqi government spokesperson Saad al-Hadithi told Baghdad Today News.

Hadithi revealed that the government is looking to reach a new agreement with the KRG on the question of oil.

He explained that Baghdad would cover the KRG’s payments to international oil companies only if they sign new agreements with the central government.

“Whenever the Kurdistan oil falls under the control of the central government and a new agreement is going to be reached with the Kurdistan Region on this matter and later activated, then Baghdad will be committed to paying the payments to the foreign companies that sign agreements with the Iraqi government,” Hadithi said.

The Kurdistan Region and Baghdad are locked in talks to resolve major issues such as oil, the budget, civil servant salaries, and the airports.

Hadithi told Iraqi Assabah Aljadeed earlier this week that the “prevailing atmosphere today between the federal government and the Region is much better than it was before the referendum.”

In a short interview with Rudaw on the sidelines of the World Economic Forum in Davos, Switzerland, KRG Prime Minister Nechirvan Barzani said that talks to resolve the oil question would take more time.

He rejected a statement from Iraqi Prime Minister Haider al-Abadi’s office which alleged the two leaders had reached an agreement for the KRG to hand over control of its oil to Baghdad.

Managing oil, and its revenues, is a recurring problem between Erbil and Baghdad. The central government stopped sending funds to the KRG when Kurdish leaders proposed exporting oil independently.

Abadi and Barzani met in Davos in late January. A statement from the KRG following that meeting said they had “decided that the Iraqi Ministry of Oil and KRG Ministry of Natural Resources will hold a special meeting on how to export oil that has been suspended for a while and reach an agreement [on the issue].”

Analyst Dr. Nussaibah Younis told Rudaw in a recent interview that the two sides have made progress in their negotiations, but control of Khurmala oil field is a major stumbling block.

The KRG has repeatedly stressed that it is ready to resolve all its issues with Baghdad within the framework of the Iraqi constitution.

Comments

 
dilan | 10/2/2018
no company trusts baghdad shiite puppet government with billions in debt, sky high corruption and uncertain future ripped apart by different shiite armed factions.
FAUthman | 10/2/2018
I always thought KRG payments owed to IOCs will become a big problem after the fall of Kirkuk, now it looks like it is! KRG owes billions to IOCs and commodity brokerage houses and to Turkey and Russia, close to $20 billion. KRG may have wanted to unload this debt on Baghdad and forget about independence. Now Baghdad says "no way, we are not paying a dime of this debt". Now the law suits may begin, and will probably last for more than a decade! At some point Baghdad may get so fed up with the problems of the Kurds and will seek to kick the Kurds out of Iraq....OK that is one way to achieve independence!
muwafaq | 10/2/2018
I think when Baghdad controlled all oil and gas fields in whole Iraq ,then they will be responsible to negotiate with companies that have agreements with KRG AND TRYING TO REACH solution accepted by both
One for all - all for one | 10/2/2018
Abadi needs Kurdish support to win the next election. The solution is to start pumping from Kirikuk oil fields and split the oil revenue to Baghdad and Erbil. Then both parties benefit and common ground is found. The middle east must stop its childish games, an eye for an eye and a tooth for a tooth. It is time to leave the middle ages and embrace traditional values as acceptance and tolerance.
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