London – Two more tankers of Kurdish oil will be loaded this week at the Turkish port of Ceyhan and the consignments have already been sold, Ashti Hawrami, the Kurdistan Regional Government’s (KRG’s) natural resources minister, said on Tuesday.
Hawrami, addressing the Iraq Petroleum Conference in London, also confirmed that the first two tanker loads of oil shipped via Kurdistan’s new pipeline to Turkey over the past month had also found buyers.
The tankers had been stuck in the Mediterranean, unable to offload, because of pressure from Baghdad and Washington on potential buyers.
Given the latest turmoil in Iraq, that pressure may now have eased. However, there was no indication at the London conference that the crisis was pushing Erbil and Baghdad to an early compromise in their long-running dispute on oil exports.
Hawrami declared: “We are not going back to where Baghdad can use its red card anytime it wants to.”
He sat alongside Thamir Ghadhban, chief advisor to Iraqi Prime Minister Nouri al-Maliki, who maintained the government’s line that all oil should be exported through the federal system as he insisted was stipulated by Iraq’s constitution.
Putting the KRG case, Hawrami said recent events had shown centralization of the Iraqi state did not work. “The new Iraq will have to have a system of power-sharing and revenue sharing,” he said. Baghdad was violating the constitution, which gave the KRG control over its own oil resources.
The central government was seeking to impose energy laws left over from the Saddam Hussein era, Hawrami charged. “From our point of view, Saddam’s laws are null and void,” he added. “Basically, anything said in Baghdad is just talk.”
He said the KRG’s revenue share had steadily dropped from 17 per cent of the national budget to 10 per cent and then 0 per cent this year. Current proposals by mediators seeking to resolve the dispute between the two sides would still leave the KRG with only 7.5 per cent of national revenues.
“People don’t add up the numbers,” he said. “Even well-wishers have failed to do their sums,” he added, without naming them. The US is the most prominent outsider to have attempted to reconcile the two sides.
Hawrami said Kurdistan was also being short-changed in terms of domestic energy consumption, of which it used to receive a 10 per cent share, now down to 3 percent. The region had built two refineries to compensate. “The KRG will catch up with this entitlement, however loud Baghdad may shout,” he said.
The minister said current Kurdish exports were at 125,000 barrels per day (bpd), a figure that would double by July and reach 400,000 bpd by the end of the year. He said the export policy would remain in place “until there’s agreement on 17 per cent or we get our own 17 per cent.”
Baghdad’s Ghadhban retorted that the Kurdish minister was using numbers to blind his audience, who included US and British officials and oil company executives. “By bringing so many figures and numbers, he managed to confuse the audience as well as myself,” he said.
But he agreed with Hawrami that Baghdad and Erbil should continue to work to find a solution.
That was a view shared by Amos J. Hochstein, the US State Department’s deputy assistant secretary for energy, who called for compromise at a time when Iraq was once again at a crossroads. “The Iraqi people need their leaders to come together and seek solutions to long-standing grievances,” the US official said.
Sir Jeremy Greenstock, a retired British diplomat who chaired Tuesday’s ministerial session of the London conference, said the present crisis in Iraq raised doubts about the capacity of the country to hold together as a state. “The one bright spot in this picture,” he said, “is that the oil-bearing regions in the south and far north are not in the areas affected.”
The KRG’s Hawrami reiterated that the autonomous government continued to reach out to Baghdad in the hope of building a new, united and prosperous country. But he warned: “The terrorists will come back if we don’t put our house in order.”
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