Kurdistan to resume oil exports
[5/15/2010]
Baghdad Oil Ministry agrees to pay costs
Kurdistan may still not receive "full authority to contract with foreign companies in order to develop oil fields, extract oil or sell it, because it is a national treasure that belongs to all Iraqis." - Hussein al-Shahristani
The Kurdistan Regional Government ceased oil exports after four months last year, but a recent agreement between the national and regional oil ministries will allow the KRG to resume exports from the region. The main factor behind the KRG's decision to stop the exports was Baghdad's refusal to pay the interest of the foreign oil companies that have contracts with the KRG.
Dr. Ali Hussein Balo, member of Iraqi Council of Representatives on the Kurdistan Alliance List and head of Parliament's Oil and Gas Committee, says that currently Iraq is in need of Kurdistan Region's oil revenues since last month Iraq's oil exports were cut from 1.9 million barrels per day to 1.7 barrels per day, something that would affect the country's economy since oil revenues constitute the largest part of the country's budget. Thus, Kurdistan's oil export can compensate for that.
However, the final decision to resume exports is still to be made by the central government's Ministry of Finance, to state its consent to an agreement by the oil ministries that the Finance Ministry will be the authorized party to make the payments to the oil companies.
Dr. Khalid Salih, official spokesperson of the KRG Ministry of Natural Resources, said that during last month's visit of the Iraqi Oil Ministry's delegation to Erbil, they agreed that they would "technically agree" to resume oil exports from Kurdistan Region's oilfields.
"Both the KRG's Ministry of Natural Resources and the Iraqi Ministry of Oil have agreed that the funds should not be at the Oil Ministry, but rather at the Ministry of Finance, 'said Dr. Salih." For that end, we set a mechanism to try to make the Finance Ministry cover the costs of those companies operating in Kurdistan. "
Deputy Iraqi Oil Minister Mu'tassam Akram said the Finance Ministry had not responded to a formal letter sent by them about paying the share of the energy companies that worked in Kurdistan Region who were supposedly to be paid by the Iraqi government, as the income of the Kurdish oil would go to the Iraqi treasury.
Speaking at a press conference in Baghdad on the occasion of the third round of licensing Iraqi oil fields to international oil companies on Thursday, May 6, Iraqi Oil Minister Dr. Hussein al-Shahristani told the reporters that his ministry and the KRG reached an agreement about the revenues and financial issues.
"According to the agreement, all the revenues of Kurdistan's oil exports will be sent back to the State Oil Company, and the Iraqi government will be liable for paying all the oil resources' extraction costs of the KRG," said Dr. al-Shahristani at the press conference.
After four months of the KRG's oil exports through the national pipelines to the Turkish Ceihan Port, which began in June 12, 2009, Dr. Ashti Hawrami, the KRG Minister of Oil, announced holding back the exports in mid October the same year due to disagreements with the central government over covering extraction costs. The KRG was exporting 90,000 barrels per day during that period.
Al-Shahristani announced on Wednesday, May 12, that in the event of approving the oil and gas law by the next Iraqi Council of Representatives, Kurdistan's government would not be given enough authority to contract with international companies to extract oil, pointing out that paying grants for the oil-producing provinces is the Iraqi Finance Ministry's responsibility.
"Adopting oil and gas law by the next Parliament will not give Kurdistan full authority to contract with foreign companies in order to develop oil fields, extract oil or sell it, because it is a national treasure that belongs to all Iraqis," al-Shahristani said during his participation with the Minister of Housing & Construction, Bayan Dazaii, at the opening of a housing compound in Karbala on Wednesday.
«There are equivalents that were allocated by the Prime Minister's for the oil-producing provinces which is half a dollar for a barrel, whilst the mechanism of paying the sums of money allocated to the producing governorates is the responsibility of the Federal Ministry of Finance, "he said.
In fact, the overarching factor behind the subsequent delays in legislating the Iraqi Oil and Gas Law has been the disagreement among the political powers in Iraq over the centralization policy and the degree of authority given to regional governments in the field of investment in their natural resources , particularly oil and gas. Kurds, as a significant side of the dispute, have been fighting for a larger authority in that respect, but the Iraqi Oil Minister has been pushing for a more centralized law with reduced power of the regions, something that the Kurds see as a violation of the Iraqi Permanent Constitution, which allows the regions to invest in the natural resources under their area of responsibility, and to share the revenues among all the country's population.
http://www.iraqdirectory.com/DisplayNews.aspx?id=12500
[5/15/2010]
Baghdad Oil Ministry agrees to pay costs
Kurdistan may still not receive "full authority to contract with foreign companies in order to develop oil fields, extract oil or sell it, because it is a national treasure that belongs to all Iraqis." - Hussein al-Shahristani
The Kurdistan Regional Government ceased oil exports after four months last year, but a recent agreement between the national and regional oil ministries will allow the KRG to resume exports from the region. The main factor behind the KRG's decision to stop the exports was Baghdad's refusal to pay the interest of the foreign oil companies that have contracts with the KRG.
Dr. Ali Hussein Balo, member of Iraqi Council of Representatives on the Kurdistan Alliance List and head of Parliament's Oil and Gas Committee, says that currently Iraq is in need of Kurdistan Region's oil revenues since last month Iraq's oil exports were cut from 1.9 million barrels per day to 1.7 barrels per day, something that would affect the country's economy since oil revenues constitute the largest part of the country's budget. Thus, Kurdistan's oil export can compensate for that.
However, the final decision to resume exports is still to be made by the central government's Ministry of Finance, to state its consent to an agreement by the oil ministries that the Finance Ministry will be the authorized party to make the payments to the oil companies.
Dr. Khalid Salih, official spokesperson of the KRG Ministry of Natural Resources, said that during last month's visit of the Iraqi Oil Ministry's delegation to Erbil, they agreed that they would "technically agree" to resume oil exports from Kurdistan Region's oilfields.
"Both the KRG's Ministry of Natural Resources and the Iraqi Ministry of Oil have agreed that the funds should not be at the Oil Ministry, but rather at the Ministry of Finance, 'said Dr. Salih." For that end, we set a mechanism to try to make the Finance Ministry cover the costs of those companies operating in Kurdistan. "
Deputy Iraqi Oil Minister Mu'tassam Akram said the Finance Ministry had not responded to a formal letter sent by them about paying the share of the energy companies that worked in Kurdistan Region who were supposedly to be paid by the Iraqi government, as the income of the Kurdish oil would go to the Iraqi treasury.
Speaking at a press conference in Baghdad on the occasion of the third round of licensing Iraqi oil fields to international oil companies on Thursday, May 6, Iraqi Oil Minister Dr. Hussein al-Shahristani told the reporters that his ministry and the KRG reached an agreement about the revenues and financial issues.
"According to the agreement, all the revenues of Kurdistan's oil exports will be sent back to the State Oil Company, and the Iraqi government will be liable for paying all the oil resources' extraction costs of the KRG," said Dr. al-Shahristani at the press conference.
After four months of the KRG's oil exports through the national pipelines to the Turkish Ceihan Port, which began in June 12, 2009, Dr. Ashti Hawrami, the KRG Minister of Oil, announced holding back the exports in mid October the same year due to disagreements with the central government over covering extraction costs. The KRG was exporting 90,000 barrels per day during that period.
Al-Shahristani announced on Wednesday, May 12, that in the event of approving the oil and gas law by the next Iraqi Council of Representatives, Kurdistan's government would not be given enough authority to contract with international companies to extract oil, pointing out that paying grants for the oil-producing provinces is the Iraqi Finance Ministry's responsibility.
"Adopting oil and gas law by the next Parliament will not give Kurdistan full authority to contract with foreign companies in order to develop oil fields, extract oil or sell it, because it is a national treasure that belongs to all Iraqis," al-Shahristani said during his participation with the Minister of Housing & Construction, Bayan Dazaii, at the opening of a housing compound in Karbala on Wednesday.
«There are equivalents that were allocated by the Prime Minister's for the oil-producing provinces which is half a dollar for a barrel, whilst the mechanism of paying the sums of money allocated to the producing governorates is the responsibility of the Federal Ministry of Finance, "he said.
In fact, the overarching factor behind the subsequent delays in legislating the Iraqi Oil and Gas Law has been the disagreement among the political powers in Iraq over the centralization policy and the degree of authority given to regional governments in the field of investment in their natural resources , particularly oil and gas. Kurds, as a significant side of the dispute, have been fighting for a larger authority in that respect, but the Iraqi Oil Minister has been pushing for a more centralized law with reduced power of the regions, something that the Kurds see as a violation of the Iraqi Permanent Constitution, which allows the regions to invest in the natural resources under their area of responsibility, and to share the revenues among all the country's population.
http://www.iraqdirectory.com/DisplayNews.aspx?id=12500