CAN'T REMEMBER IF THIS WAS POSTED OR NOT....
Iraq Approves $560 Million for Kurdish Oil Payments
BAGHDAD, March 27 | Tue Mar 27, 2012 12:04pm EDT
(Reuters) - Iraq's central government has approved payment of close to $560 million to oil producers in the autonomous Kurdish region, its finance minister said, after Kurdish authorities threatened to halt exports due to a lack of payments from Baghdad.
The central government has a long-standing dispute with theKurdish Regional Government (KRG) in the north over the controlof oil in the region, which has throttled payments. Baghdadmaintains it alone has the right to export oil.
On Monday, the KRG said it had reduced exports to 50,000barrels per day (bpd) and warned it would stop them altogetherif Baghdad was not forthcoming with payments, which it saidamounted to around $1.5 billion.
"We've allocated 650 billion Iraqi dinars ($559.4 million)in the 2012 budget to pay the companies, which we will releaseafter we receive the audit from the board of supreme audit,"Finance Minister Rafie al-Esawi told reporters on the sidelineof the Arab League summit on Tuesday.
Iraq's ministries and government offices are all audited bythe board of supreme audit, an independent body.
Iraq is hosting the meeting for the first time in 20 years,and the three day event opened on Tuesday, with talks focused oneconomic and financial cooperation between Arab states.
Iraq approved a $100 billion budget for 2012 in February,based on an average oil price of $85 per barrel and 2.6 millionbpd in crude exports.
Its Deputy Finance Minister Fadhil Nabi told Reuters a totalof about $2.53 billion had been set aside as payment for oilcompanies working in Iraq, which included the $560 million foroil producers in the northern Kurdish zone.
Iraq, which has the fourth-biggest oil reserves in theworld, aims to boost its oil production capacity to 8-8.5million bpd by 2017, which could vault it into the top echelonof world producers.
As much as a third of the oil extracted in northern Iraq is refined locally for domestic use, partly due to late payments from Baghdad for crude pumped into the major pipeline to Turkey and in part because it reduces the costs of producers.
Tensions between Baghdad and the KRG over oil have been highsince October, when Exxon Mobil announced a Kurdishexploration deal that the central government deemed illegal. ($1 = 1161.9000 Iraqi dinars) (Additional reporting by Aseel Kami; Writing by SerenaChaudhry, editing by Jane Baird)