Iraq-Kurdistan seal oil deal

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An oil worker tending to a supply pipeline in Iraqi Kurdistan. Photo – AFP

Kurdistan Regional Government (KRG) announced on Thursday it has struck a deal with Iraqi federal government that will ensure it receives 147,000 barrels of oil products per day, putting an end to a longstanding dispute over oil payments.

However, reports suggest the latest agreement will solve only few points of a broader feud between Baghdad and Erbil over oil exports, energy policy and territory which have become increasingly contentious topics.

“This deal cannot solve all the problems currently but it is considered a good step,” Kurdish Prime Minister Nechirvan Barzani said in a statement posted on the Kurdistan Regional Government (KRG) website on Thursday.

Under the terms, the federal government in Baghdad will send 17% of its oil products to Kurdistan, which works out at 147,000 barrels per day, the statement said.

Iraqi Kurdistan’s crude oil is prized by global oil giants because it is plentiful and easy to get at, rare among undeveloped energy resources. But the companies working there under contracts with the semi-autonomous Kurdistan Regional Government (KRG) are not getting much out, and they are not getting paid, all because of a dispute over control with the national government in Baghdad, a Reuters special report said last month.

Kurdistan, autonomous with its own government and armed forces since 1991, gets central government funding and uses national pipelines to ship its oil. Baghdad says only the central government has the right to ship oil and gas.

Barzani said Kurdistan had formed a committee to calculate oil contract revenues and expenses in Kurdistan. He said a report on this would be published at a later date.

Kurdistan has said it will keep its oil production for export at 140,000 barrels per day this month before raising it to 200,000 bpd for the rest of the year. It also said Baghdad would pay 1 trillion Iraqi dinars or around $857 million for foreign companies working in the Kurdish region.

Kurdistan halted shipments of its oil in April in protest over what it said were payments due from Baghdad to companies. It restarted shipments later, but had said it would halt them again by September 15 if there was no agreement on payment.

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