“This is Iraqi wealth,” said Abadi, adding that all Kurdistan Region’s oil should be exported through Iraq’s State Oil Marketing Organization (SOMO).
Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline after a Paris-based arbitration court last March ordered Ankara to pay $1.5 billion in damages to Baghdad for allowing Kurdish authorities to independently export oil between 2014 and 2018 in breach of a 1973 pipeline agreement. Oil exports have yet to resume despite talks between the Iraqi, Turkish, and Kurdish governments.
Abadi, who served as prime minister of Iraq between 2014 and 2018, told Rudaw’s Dildar Harki on Sunday that his cabinet filed the lawsuit in order to pressure Erbil and Ankara to make an agreement with Baghdad.
“Frankly speaking, our goal was to pressure brothers in the Kurdistan Region and Turkey to reach an agreement [with us] because that was a wrong path. We are talking about Iraqi oil, which belongs to all Iraqis. But they traded with it as per an agreement whose details were not known to us,” the former prime minister said.
“We did not know what the agreement between the Region and Turkey included. We wanted to know because it is our right,” he said, adding that he still wants to see details of the agreement between Ankara and Erbil made public.
Though it was his government that filed the case and won, Abadi said this was not the ending he had wanted.
“Ultimately, we reached the end without reaching an understanding and what we feared happened. If we had reached an agreement before the court ruling, it would be in the interests of all of us, but we did not due to a sort of stubbornness and the understanding that this would be considered a compromise to the opposite side,” he stated.
Before the halt, Erbil was exporting around 400,000 barrels a day through Turkey, in addition to some 75,000 barrels of Kirkuk’s oil.
The loss in billions of dollars of oil revenue, the main source of income for the Kurdistan Regional Government (KRG), has worsened the financial situation and left the government unable to pay its public sector without assistance from Baghdad.
Iraqi Prime Minister Mohammed Shia’ al-Sudani told Bloomberg in January that the main obstacle before the resumption of the exports is a disagreement with international oil companies about production costs.
Oil producers have asked the White House to pressure Sudani into resuming the exports when the prime minister meets with United States President Joe Biden in Washington on April 15.
Abadi said that the Iraqi budget was also affected by the suspension of oil exports and that paying the salaries of the KRG’s civil service is another burden on the federal government.
KRG salaries
Erbil and Baghdad have been at odds over the Kurdish government’s share of the federal budget for years. Irregular delivery of funds from Baghdad has left the KRG in dire financial straits for over a decade.
Erbil has made only one salary payment to its civil servants since October last year. It has also refused to receive a partial payment from the Iraqi government to cover February’s payroll, demanding the full amount instead.
“I believe that the people [of Kurdistan] are innocent. They should not pay the price when the political leaders fail to reach an agreement. The people should not be punished. I believe that it is not fair for the people to be punished as a result of their political leaders’ attitudes and decisions,” the former prime minister told Rudaw.
Financial disputes between Erbil and Baghdad worsened during Abadi’s time in office as the country was fighting the Islamic State (ISIS), oil prices dropped dramatically, and Baghdad was furious at the Region for its independent oil exports. It was also during his cabinet that the Kurdish administration held an independence referendum in the Kurdistan Region and disputed territories like Kirkuk. In a response to the plebiscite, Baghdad forced Peshmerga fighters out of the disputed areas and imposed an international embargo on Erbil.
Abadi said that the current prime minister is “serious” about resolving its financial disputes with the Kurdistan Region, but the budget law prevents him from doing so.
Last June, Iraq passed a three-year budget of which the Kurdistan Region's share is 12.6 percent. Baghdad has claimed it has fully implemented its financial obligations to the KRG, including through loans to assist Erbil in paying the salaries of its civil servants. The law obliges the Region to hand over its oil to the federal government but this had not taken place.
Iraq’s Supreme Federal Court last month ordered the KRG to submit a breakdown of the monthly budget for its payroll to the federal finance ministry so that Baghdad could start paying the Region’s share from the federal budget. The ruling requires the Kurdish government to open accounts for its employees at state-owned banks - a process dubbed “localization” by Baghdad.
Earlier this month, the Iraqi finance ministry announced that it had begun paying the Kurdistan Region’s civil servant salaries for the month of February while noting that the payment of salaries for March “will take place once the Region meets the salary settlement requirements,” referring to the bank accounts.
The federal court has ruled that the payment of the Region’s civil servants’ salaries by Baghdad should continue in cash until the localization process is complete.
The Iraqi government has so far provided around 600 million dinars for February while the KRG says it needs more than 900 million dinars to be able to distribute salaries.
Abadi said that when he was the prime minister in 2017 and 2018 he and the KRG worked on treating all employees of the country equally, but the attempt failed. He added that a decision should be made as to whether the KRG’s employees are considered the civil servants of the federal government or those of the Region, arguing that in federal countries like Iraq all employees should be treated as federal. He used the US as an example where government employees across all 50 states are paid by the federal government.
“If they are considered as local employees then they [the KRG] are responsible for them because they have their own income,” he noted.
Abadi claimed that the KRG started asking Baghdad to pay the salaries of its civil servants only after “failing to do so themselves.”
Withdrawal of coalition troops
A US-led global coalition was formed in 2014 to combat ISIS when the group took control of swathes of Iraqi and Syrian land. ISIS was declared territorially defeated in Iraq in 2017, but the threat remains as the group continues to carry out hit-and-run attacks.
Pro-Iran armed groups, however, have frequently asked for the withdrawal of US troops from the country.
In January 2020, angry over the US killing of Iran’s Qasem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis, the Iraqi parliament passed a non-binding resolution to expel all foreign forces.
Calls for the expulsion of American troops were renewed when the US hit several militia bases in Iraq late last year and early this year, blaming them for dozens of drone and rocket attacks on its troops. The pro-Iran groups said their attacks were in response to Washington's support for Israel in its war with Hamas in Gaza Strip.
With growing calls in Iraq for the expulsion of the Americans, in late January, the US and Iraq began discussions about the future of the global coalition’s mission against ISIS.
Abadi told Rudaw that American troops are in the country on the invitation of Baghdad, therefore they should be asked politely to leave or both sides should seek a new mechanism if they need to remain.
“ISIS now does not control Iraqi territory, although terrorism is still a challenge, but the situation is different, so we must change our mechanisms. It is not suitable to continue with the same mechanisms, but it is also wrong to tell them to leave and expel them,” he said.
“In the end, you sought help from them, and they came at the request of the Iraqi government. Therefore, the Iraqi government must sit down and decide what is good, how many of these forces should remain, and what we want from these forces,” he added.
