Iraq-Kurdistan feud rumbles on as Baghdad withholds payment
Iraq is to refuse payment to the semi-autonomous Kurdistan region in a long running dispute over oil rights
Click here to add Baghdad as an alert
Disable alert for Baghdad,
Click here to add Chevron as an alert
Disable alert for Chevron,
Click here to add Exxon Mobil as an alert
Disable alert for Exxon Mobil,
Click here to add Faisal Abdullah as an alert
Disable alert for Faisal Abdullah,
Click here to add Hussain Al Shahristani as an alert
Disable alert for Hussain Al Shahristani,
Click here to add Kurdistan as an alert
Disable alert for Kurdistan,
Click here to add Kurdistan Regional Government as an alert
Disable alert for Kurdistan Regional Government,
Click here to add Reuters as an alert
Disable alert for Reuters,
Click here to add Saddam Hussein as an alert
Disable alert for Saddam Hussein,
Click here to add Total as an alert
Disable alert for Total
Iraq will not pay oil companies operating in Kurdistan because the autonomous region has failed to export the volume of crude it pledged, a spokesman for Hussain Al Shahristani, Iraq’s deputy prime minister for energy, said.
The comments ramp up a standoff between Baghdad and the region, which have been locked in a long-running spat over land and petroleum rights. Tension appeared to ease in September, when Kurdistan and Baghdad struck a deal under which the autonomous region agreed to continue pumping its share of national oil exports in return for payment from the central government.
An export target of 200,000 barrels per day (bpd) has been set. Following that agreement, Baghdad transferred an initial sum of 650 billion Iraqi dinars ($560 million) to the Kurdistan regional government (KRG), but a subsequent payment is now overdue and Kurdish crude exports dropped to around 5,000 bpd.
“The Iraqi side gave them the (initial) sum, but they haven’t supplied the 200,000 bpd,” Faisal Abdullah told Reuters via telephone.
“The government fulfilled its obligations according to the agreement but Kurdistan shirked theirs,” he said.
In recent weeks, oil exports from Kurdistan have slumped from a peak of around 200,000 bpd. The reason for the reduction is not clear, but the region has previously halted exports in protest at Baghdad’s withholding of payments.
Baghdad rejects the deals signed between Kurdistan and oil companies including majors Exxon Mobil, Chevron and Total as illegal and has blacklisted some that have ventured into the northern region.
Kurdistan says its right to grant contracts to foreign oil firms is enshrined in the Iraqi constitution, which was drawn up following the 2003 invasion that ousted Sunni dictator Saddam Hussein. The oil payment dispute is part of a broader debate between Baghdad and Kurdistan over control of oil and territories which is straining Iraq’s uneasy federal union one year after US troops left.
- Al Tayer bucks the US department store trend with Bloomingdale's Kuwait opening
- Gulf Islamic banks set to outperform conventional banks for second year: Moody's
- Jordan secures EU finance for socioeconomic and environmental programs
- Same-day service deliveries in GCC an untapped market: Wing CEO
- Will terror attacks damper Arabs' appetite for European holidays?