IN DETAIL.. THE PROBLEMS OF THE OIL FILE BETWEEN BAGHDAD AND ERBIL – URGENT
Baghdad Today – Sulaymaniyah
On Wednesday (March 27, 2024), oil expert and advisor for energy affairs at the Patriotic Union of Kurdistan (PUK), Bahjat Ahmed, pointed out the most important problems of the oil file between Baghdad and Erbil.
Ahmed said in an interview with “Baghdad Today” that “the lack of transparency in oil revenues and the high cost ratio at the expense of the region’s profit, led to the inability to cover the budget, with the failure to establish an institution to manage the oil file and not allow the establishment of the oil industry, and the allocation of all oil produced for foreign export, is one of the problems.”
He added, “The legal conditions included in the region’s contracts with oil companies in favor of the Kurdistan government, must be implemented, and the public oil companies listed in the oil and gas law for Kurdistan must be established, and also the absence of a condition in the region’s contracts about setting a ceiling for oil production has allowed companies to pressure oil fields for the purpose of producing the largest possible quantity in the shortest time, and this caused damage to the majority of fields.”
He explained that “there is the publication of fake information about oil reserves in the region, so that oil companies benefit from that information for the purpose of raising the price of their shares on the global stock exchange without Kurdistan benefiting from it one dollar.”
“From 2013 until the cessation of oil exports last year, companies produced one billion and 600 million barrels of oil in all oil fields in the region, and these companies invested about 12 to 14 billion dollars,” he said.
In a sharp statement issued on Monday, the Ministry of Oil of the federal government in Baghdad blamed foreign companies operating in the oil sector in Kurdistan for the suspension of exports through the Iraqi-Turkish pipeline since last March.
Abikour, a consortium of 8 companies operating in the oil sector in Kurdistan that exports 50 percent of its oil to Turkey, claimed in its statement that the Iraqi government has not taken significant steps to open the Iraqi-Turkish oil pipeline and resume the export of oil to the Kurdistan region, despite Turkey’s announcement in October 2023 that the line is ready.
Kurdistan used to export 450,000 barrels per day to Turkey to secure the salaries of its employees and financial revenues, due to the absence of an oil and gas law regulating the management of oil wealth in Iraq. However, the region’s export of oil without reference to the federal government, and without its commitment to pay 250,000 barrels to Baghdad in accordance with the federal budget law, caused deep problems between the two sides, whose catastrophic repercussions were reflected in the standard of living of the region’s residents after the federal government failed to pay the salaries of its employees since 2015, until the region fulfilled its financial obligations to Baghdad.
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