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Kurdistan Oil & Gas Development

A collection of threads on topics that get updated regularly :
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Thu Feb 07, 2019 11:50 pm

DNO plans 20 Kurdistan wells, acquires Faroe

DNO ASA, Oslo, plans to drill as many as 20 exploration and production wells in the Kurdistan region of Iraq this year as it expands in Norway through acquisition.

Spending more than 40% above the 2018 level of $300 million, the company will drill 14 wells in Kurdistan’s Tawke field, 4 at Peshkabir, and 2 on the Baeshiqa license. The company also plans five wells in Norway.

Much of the 2018 spending, which was up from the prior year, was for Peshkabir development and Tawke drilling.

DNO planned to start production from the Peshkabir-9 and Tawke-52 wells this month. On the Baeshiqa license, testing of the first exploration well has been delayed by rain but is expected to begin this month.

Most of the company’s 128,000 b/d of operated oil production, 90,000 b/d net to its working interest, is in Kurdistan. The rest is in Oman.

DNO said it is completing its unsolicited takeover of Faroe Petroleum PLC, bringing its Norwegian holdings to 90 licenses, 22 operated (OGJ Online, Dec. 5, 2018).

It said it has acquired 96% of Faroe shares and has begun compulsory acquisition of remaining shares.

https://www.ogj.com/articles/2019/02/dn ... faroe.html
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Re: Kurdistan Oil & Gas Development

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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Wed Feb 13, 2019 1:19 am

Kirkuk bolsters Iraqi oil exports in February

Iraq's oil exports are promising so far in February and Oil Minister Thamir Ghadhban predicts that the Kurdistan Region will adhere to its delivery agreement

Iraq has averaged oil exports of 3.63 million bpd so far in February, Reuters reported on Monday. Baghdad reported 3.65 million bpd in January, according to the ministry's figures.

Reuters cited better production in Kirkuk. Baghdad and Erbil reached an agreement in November to export oil through Kurdistan's pipeline that terminates at the Turkish port of Ceyhan.

"I am very optimistic that the Region will adhere to delivering 250,000 barrels per day in accordance with the 2019 state budget," Ghadhban told Reuters.

The Iraqi oil ministry reported Kirkuk averaged about 100,000 bpd in January. It is capable of upwards of 300,000 bpd with current infrastructure.

He described a recent meeting with KRG Prime Minister Nechirvan Barzani as positive.

The Kurdistan Region produces 420,000 bpd, according to Reuters. The oil and gas sectors are privatized in Kurdistan, but state-owned elsewhere in Iraq.

Ghadhban expects the Kurdistan Region to output 550,000 bpd by the end of the year. The semi-autonomous region is recovering from several economic crises and is heavily dependent on its energy sector for revenue.

Analysts at the recent World Economic Forum said they expect oil prices to more than likely be closer to the $80-$100 bpd range, rather than $40-$60.

When prices fell globally in 2014, it negatively impacted the Kurdistan Region in particular as it exports oil independent of Baghdad and is not beholden to OPEC.

The General Manager of Basra Oil Company Ihsan Abdul Jabbar told Reuters he expects the monthly average to be 3.55 million bpd.

http://www.rudaw.net/english/business/12022019
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Feb 17, 2019 2:04 am

Genel Energy plc’s Acquisition of Stakes in
Chevron-operated Blocks in Kurdistan Region of Iraq


Genel Energy plc executed the acquisition of stakes in the Chevron-operated Sarta and Qara Dagh blocks in the Kurdistan region of Iraq.

Genel will acquire a 30 percent interest in the Sarta license by paying a 50 percent share of ongoing field development costs until a specific production target is reached, together with a success fee payable on achievement of a production milestone. Chevron will retain a 50 percent interest in the Sarta license. Kurdistan’s regional government will hold the remaining 20 percent. Genel estimates that its total spend up through the end of 2020 will be approximately $60 million. Genel will acquire a 40 percent interest in the Qara Dagh appraisal license and become the operator through a carry arrangement.

Genel Energy is an independent oil and gas exploration and production company listed on the main market of the London Stock Exchange. The company, with headquarters in London and offices in Ankara and Erbil, is one of the largest London-listed independent oil producers, and is the largest holder of reserves and resources in the Kurdistan region of Iraq.

Bracewell advised with a team including Ben James, Adam Waszkiewicz and Catherine Todd.

http://www.globallegalchronicle.com/gen ... n-of-iraq/
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Thu Feb 21, 2019 1:35 am

Iran Ready to Export Natural Gas to Iraqi Kurdistan

The Marivan-Saqqez pipeline is a branch of the Sixth Iran Gas Trunkline (IGAT-6) with a capacity to transfer 110 mcm of gas per day from South Pars Gas Field in the Persian Gulf to western regions, namely Kurdestan province

Most of the infrastructure is in place to export natural gas from western Kurdestan Province to Iraq’s semi-autonomous Kurdistan region, provincial head of the National Iranian Gas Company said.

"NIGC is ready to export 8 million cubic meters of gas per day to Iraqi Kurdistan in the north," Ahmad Felegari was quoted as saying by IRNA.

Felegari said talks are underway with Iraqi officials to complete technical and financial details.

"As soon as negotiations produce results, NIGC will start gas exports to the region through a diversion of the Marivan-Saqqez pipeline," he said.

https://financialtribune.com/articles/e ... -kurdistan
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Wed Feb 27, 2019 11:25 pm

KRG nets $1.3 billion in oil sales for Q3 of 2018

The US-headquartered auditing company Deloitte released its findings of the Kurdistan Regional Government's oil dealings for the third quarter of 2018 on January 28, 2019. Image: Deloitte report

ERBIL, Kurdistan Region — As part of its continued energy sector audits, Deloitte announced on Wednesday that the Kurdistan Region Government (KRG) sold crude oil and condensate worth more than $2.26 billion in the third quarter of 2018 up from $1.84 billion in the previous quarter.

It had two findings.

"Oil export and consumption - We did not identify any misstatements in the 1 July 2018 to 30 September 2018 oil export and consumption data," stated Deloitte in their report.

The Kurdistan Region had a "gross value of crude oil and condensate sold (piped exports and local sales)" of $2,262,409,784 in the three-month period.

"Oil sales – We did not identify any misstatements in the 1 July 2018 to 30 September 2018 oil sales data and the net amount received in the period by the KRG," added Deloitte.

Because of payments to other companies, licensing agreements, repayment of debts, payments to oil producers, among other costs, the KRG netted more than $1.3 billion — $1,288,773,374 for sales and related activities, and $104,598,002 in additional advance payments made by buyers.

It averaged $63.098 per barrel of oil exported through the Ceyhan pipeline (totaling 35,246 851 barrels), and $67.734 for crude and condensate sold locally (totaling 174,761 barrels).

In the previous quarter, the KRG exported 30,190,384 barrels of oil through the pipeline.

An advisor to KDP President Masoud Barzani explained that the audits help in improving Erbil-Baghdad relations.

"It's an important issue between Iraq and the KRG," Masoud Haider, a former MP in the Iraqi parliament, told Rudaw English. "We hope that in 2019, with an open discussion — all the issues, economic issues between the KRG and the federal government will be on the table and so on."

The audits are also a tool for the KRG when drafting contracts with foreign energy companies.

Deloitte was appointed to review the KRG's oil activities for 2014-2017 by the KRG's Regional Council for Oil and Gas Affairs.

The KRG welcomed the report.

"The Regional Council for Oil and Gas Affairs acknowledges the positive feedback received from stakeholders, including the international community, and reiterates its commitment to the people of Kurdistan that the two international audit firms, Deloitte and Ernst & Young, will continue to independently review the oil and gas sector, inclusive of all the streams," it stated.

http://www.rudaw.net/english/business/270220191
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sun Jul 21, 2019 9:43 pm

Ashti Hawrami to serve as top
energy official in new KRG cabinet


Following weeks of speculation concerning the fate of the long-serving Minister of Natural Resources (MNR) Ashti Hawrami, the main architect of the Kurdistan Region’s oil sector, the Kurdistan Regional Government (KRG) announced Sunday he is to be appointed assistant to the prime minister for energy affairs

In a decree dated July 17 that was signed by Prime Minister Masrour Barzani, Abdullah Abdul Rahman Abdullah, known as Ashti Hawrami, will serve as the top official for energy affairs, endowing him with a number of critical tasks.

Decree from KRG Prime Minister Masrour Barzani naming Abdullah Abdul Rahman Abdullah, known as Ashti Hawrami, as assistant to the prime minister for energy affairs. Photo: submitted

It is not currently clear whether the powers handed to Hawrami as an assistant to PM Barzani, making him the government’s top energy official, will result in the scrapping of the ministry of natural resources.

One of Hawrami’s main tasks as assistant will be to “oversee the implementation of the decisions, recommendations and policies of the Kurdistan Regional Government in the oil and gas sector” as defined by Article 6 of the 2007 Oil and Gas Law of the Kurdistan Region in consultation with the prime minister.

Hawrami will also have to present recommendations to PM Barzani in the energy sector and “coordinate between the relevant” energy authorities in the Kurdistan Region and carry out tasks delegated by the PM.

When Hawrami was first appointed minister for natural resources in 2006 the Kurdistan oil sector was still struggling to attract investment from abroad. It was ridiculed by Iraq’s central government, which told Kurdish delegations visiting Baghdad they would not even be able to extract their oil from the ground. The Kurdish delegations were repeatedly told they would not be able to explore, extract, or market their oil.

But as the rest of Iraq was mired in sectarian violence after the 2003 war, KRG officials started working on their oil and gas sector and finally introduced a business friendly oil and gas law in 2007 that opened the gates to many foreign companies including oil giants to enter Kurdistan and search for oil.

By 2007, Hawrami had held several top oil executive positions in the private sector in the United Kingdom and was well positioned to head the nascent energy sector. He was also familiar with the Iraqi oil sector as he had worked in the Iraqi National Oil Company (INOC) after his graduation from Baghdad University from 1971 to 1974.

After the initial success of attracting small to medium seized oil companies to the Kurdistan Region, the Kurds started thinking about marketing their oil. However, due to a decades long dispute with the central government, they knew they could not rely on the goodwill of Baghdad.

In order to market their oil to international traders, they first needed to transport their oil out of the landlocked Kurdistan Region. The only viable option appeared to be through Turkey. The KRG and in particular then-prime minister Nechirvan Barzani worked to improve relation with Ankara despite years of animosity between the two parties.

The construction of the pipeline was almost completed by the summer of 2013. The first shipment of oil through the pipeline was marketed in May 2014.

In this September 2013 file photo, construction work on a section of oil pipeline nears completion in Peshkhabur on the border between the Iraqi Kurdistan Region and Turkey. Photo: Fazel Hawramy / Rudaw

Hawrami is credited by industry executives and KRG officials as the driving force behind the independent Kurdish oil sector. However, he has also been criticized by opposition parties in the Kurdistan Region for the lack of transparency and accountability in the oil and gas sector. Several important public companies that the KRG had to establish as part of 2007 Oil and Gas Law were postponed. Moreover, there were several international disputes between various companies and the KRG, with the minister of natural resources absorbing the bulk of the criticism.

In his defense, Hawrami has said his job has been to make the oil and gas sector work in Kurdistan and bring in revenue for the KRG, but he should not be held responsible for what the KRG did with the oil revenues.

While disputes between Erbil and Baghdad are ongoing over the sale of oil and the share of the KRG budget from the federal government’s overall budget, the 2007 Oil and Gas Law of the Kurdistan Region outlines that the KRG and the federal government shall “agree … in the joint management of oil and gas extracted from current Fields in the Region” so long as conditions set out in Article 19 of KRG Oil and Gas Law are met, including setting up a general petroleum revenue fund for the whole of Iraq, restructuring the petroleum industry in Iraq to encourage private investment, and finally for the KRG to have a proportional role in the Federal Oil and Gas Council.

The Assistant to the Prime Minister for Energy Affairs will be required to attend meetings of the Regional Council for Oil and Gas Affairs and prepare the agenda. The Council, as such, will have an additional member in the future. Previously, it had five members: the prime minister presided over the council, the deputy PM was deputy president, while the ministers of Natural Resources, Finance and Economy, and Planning were members.

Hawrami’s fate was a point of discussion earlier this month when the new KRG cabinet was approved by the parliament and prime minister omitted a candidate for the minister for natural resources.

Hawrami, who holds a PhD in Reserve Oil Engineering, has been the minister for natural resources since the post was created in May 2006. He was re-appointed in 2009 followed by a third tenure in 2012. He served under past prime ministers Nechirvan Barzani, now the Kurdistan Region president, and Barham Salih, now the Iraqi president.

KRG Prime Minister Masrour Barzani had indicated his administration aims to “develop a constructive and stable partnership” with Baghdad, a welcoming sign at a time that the wider Middle East region is going through a tumultuous time as tensions between the US and Iran rise.

With Adil Abdul-Mahdi approaching his first anniversary as Iraq’s prime minister, the appointment of Hawrami indicates some progress in settling disputes between Baghdad and Erbil.

https://www.rudaw.net/english/business/15072019
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Mon Aug 19, 2019 1:16 am

Iraq to begin exporting Kirkuk
oil to Jordan in coming days


Jordanian Minister of Energy and Mineral Resources Hala Zawati said this week that Iraq would soon complete preparations to start supplying her country with 10,000 barrels per day (bpd) of oil from the disputed province of Kirkuk

Iraq agreed in January to provide Jordan with oil from the Baiji refinery relying on a price formula that is equal to the rate for Brent crude, a benchmark price for purchases of oil worldwide, minus transport costs and differing specifications.

Zawati was quoted by the Ammon news website as saying that the necessary procedures to start the transfer are in their final stages and exports to Jordan would start in a short time, though she did not give a specific date.

She stressed that there are no outstanding issues that would hinder the successful arrival of the Iraqi oil in Jordan.

The Energy and Mineral Resources Minister previously announced that the oil would start arriving at the end of July but apparent complications have pushed back the date.

Zawati traveled to Iraq earlier this year for a meeting with government officials in Baghdad following a visit by the country’s monarch, King Abdullah, a first since 2008.

Iraq and Jordan signed a 2013 pipeline agreement worth about $18 billion and announced that multiple financing options would be considered. The Jordanian port of Aqaba, on the northern tip of the Red Sea, has long been a route for Iraqi imports and exports.

A 1,700 km pipeline will have to be built from Iraq's southern port of Basra, through the province of Najaf and vast desert regions of embattled Anbar Province, into Jordan, and down again to the southern port of Aqaba.

https://www.kurdistan24.net/en/economy/ ... 2fa8ad8ac4

So again Iraq sells oil stolen from Kurdish land while Kurds do nothing - they fail to unite and argue among themselves instead of protecting Kurdish land and it's people X(
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Mon Nov 18, 2019 6:36 pm

SMALL CAP SHARE IDEAS

Is Genel Energy a potential income stock?

Recent numbers from Genel Energy underlined the improvement both in its situation and in the part of Iraqi Kurdistan where it operates.

Production was up, but so was the amount of cash generated by the oil group.

In total, Genel has generated $413million so far in 2019 and had net cash of $115million at the end of September.

Five years ago Genel had a market capitalisation over £3bn, but now still finds itself valued at less than a quarter of that

It's a marked change in fortune for the UK-listed oiler, where only a few years ago the region's economic difficulties and the fight against ISIS meant oil companies operating in the region struggled to get paid.

A slump in crude prices and internal disputes between Kurdish authorities and their Iraqi counterparts added to the pressure.

One of the casualties was Genel, which five years ago had a market capitalisation over £3billion, but now still finds itself valued at less than a quarter of that.

Unsurprisingly, sentiment towards the stock closely follows the political and economic situation in Kurdistan.

ISIS's gradual decline means the region is increasingly stable, while increased revenues from oil sales and a series of economic reforms has helped to transform the economy.

Under former chief executive Murat Özgül, who stepped down in early April, and his successor, the company's former chief operating officer, Bill Higgs, Genel's balance sheet has been transformed.

'The economic situation in Kurdistan has improved to such an extent that we've now been paid flawlessly for three-and-a-half years by the Kurdistan Regional Government,' says Higgs.

This reliability has more than offset a drop in production at Genel's key asset, Taq Taq, which saw peak production of over 100,000 barrels daily (bopd) but is now increasing from a stable base of around 14,000bopd.

Genel is targeting production of a net 36,900bopd in 2019.

Another recent boost has been a tie-up with Chevron, the US supermajor where Higgs used to work.

In January, Genel snapped up stakes in two of Chevron's projects in Kurdistan called Sarta and Qara Dagh with the former due to come onstream next year. These fields are estimated to host as much as 150million barrels of oil, so there is plenty of upside potential.

Sarta and Qara Dagh are convenient in that Higgs and his team know the area well, but he says the quality of a project is more important than its location.

'If Sarta had come up anywhere in the world, we would have done that deal. We're agnostic to the location and it's really about the characteristics of the deal. What we want is projects that are near to cash generation,' he explained.

Behind this, Genel has a 'free option' on a couple of enormous oil and gas fields in its usual hunting grounds, which have often been talked up as potential game-changers.

The plan is to develop Bina Bawi first as it's the smaller asset, before moving onto Miran further down the line.

'Once you've demonstrated that you can get one running, then you can go and build another one and another one.'

Because Miran has been pushed to the back of the queue, Genel took a decision to write down its value, although it believes the quality and potential of the asset remains unchanged.

Despite all the investment planned in 2019 and beyond, Genel has confirmed it will pay an interim dividend of 5 cents per share next month and to increase it going forward.

'Given the fact that we're making all that investment in growth and still making all this cash, we thought it was the right time to start returning some of that cash to shareholders,' Higgs said.

Genel believes it can generate at least $100million of free cash flow annually based on a conservative $45 per barrel oil price. Not that oil prices that high are a requirement.

One of the benefits of working in Kurdistan are the low operating costs, which means the company remains cash-generative even at $35 a barrel.

Rapid payback from low break-even assets gives us resilience and significant flexibility says Higgs and it's a combination that is getting noticed especially by those nearby.

Ankara-based Bilgin Grup Dogal Gaz, for example, has edged its stake above 20 per cent recently. There is also activity away from Kurdistan, where Genel says farm-out talks have started on an onshore block in Somaliland in Africa.

Here, it has just taken 100 per cent ownership of a block with 'multiple stacked prospects' that it estimates each contain an estimated 200million barrels and that are hardly recognised in the current share price of 211p.

https://www.dailymail.co.uk/money/inves ... stock.html
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sat Nov 23, 2019 12:23 am

Kurdistan Could Soon Start Shipping 250,000 Bpd Of Crude To Baghdad

The semi-autonomous Iraqi region of Kurdistan may begin deliveries by early next year of around 250,000 bpd of crude oil to the federal government in Baghdad for exports, Iraqi Oil Minister Thamer Ghadhban said

Under an agreement from two years ago, Kurdistan is obliged to send at least 250,000 bpd to Iraqi state oil marketing company SOMO to be exported via the pipeline to the Ceyhan port in Turkey, Reuters quoted the Iraqi oil minister as saying on television late on Thursday.

The proceeds from the exports of these volumes are set to go to Iraq’s federal budget, Ghadhban added. X(

In October, the Kurdistan region pumped 440,000 bpd of oil, he said.

Iraq and Kurdistan have squabbled for years about the exports from the northern semi-autonomous region, with the Kurds exporting oil on their own since 2013.

In November last year, Iraq resumed oil exports from the northern Kirkuk province, a year after it had stopped oil flows from the area due to a dispute with the semi-autonomous Kurdistan region.

Around 300,000 bpd of crude oil previously pumped and exported in the Kirkuk province to the Turkish port of Ceyhan were shut in when the Iraqi federal government moved in October 2017 to take control over the oil fields in Kirkuk from Kurdish forces after the semi-autonomous region held a referendum that Baghdad didn’t recognize. However, the only export outlet of the Kirkuk oil is the oil pipeline of the Kurdistan Regional Government (KRG).

Iraq is now preparing to boost its oil export outlets, and plans to rebuild and expand the Baghdad-controlled oil pipeline out of Kirkuk, which is not functional currently. The expansion and reconstruction would add 1.1 million bpd of export capacity for Iraq to the port of Ceyhan. Iraq’s other key plan to boost export capacity is the construction of an artificial island south of the Al-Basrah off­shore terminal (ABOT) in the Persian Gulf, to boost exports from its key southern ports.

https://oilprice.com/Latest-Energy-News ... ghdad.html
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Tue Nov 26, 2019 1:34 am

KRG reaches 2020
oil-for-budget deal


The Kurdistan Regional Government (KRG) has fully committed to handing over a daily average of 250,000 barrels of oil in return for its share of the federal budget, after reaching an initial deal with the Iraqi federal government for the year 2020

A KRG delegation traveled to Baghdad on Monday – its second visit in three days – to reach a deal with central government over Erbil’s share of the budget and its independent oil exports. A deal to handover the 250,000 barrels of oil per day to state oil marketing company SOMO was reached following six hours of discussion.

“There is now an initial agreement…for the [Kurdistan] Region to handover an average of 250,000 barrels per day of produced oil in the Region to the Iraqi Oil Marketing Company [SOMO], which will supervise its export through the Ceyhan port in Turkey… starting from January 1, 2020,” Iraqi Minister of Oil Thamir Ghadhban told reporters after the meeting.

The agreement on oil forms “one of the important pillars” of the 2020 budget bill, Ghadhban explained.

“In return, there is a budget [bill] being prepared, and the Region’s representatives will be part of it alongside their colleagues in the federal government,” he said.

Delegations will meet in Baghdad to finalize the budget bill proposal next Sunday and Monday, Ghadhban added.

The initial agreement was also confirmed by Iraq’s Minister of Planning, Nouri Dlemi.

“Agreements were reached over many of the essential matters. Next week, there will be a meeting to finalize the agreements that were reached in this meeting,” Dlemi told reporters.

“Starting from January 1, 2020, 250,000 barrels will be handed over [by the KRG to the Iraqi government],” the planning minister reiterated.

The agreement between the KRG and Iraqi federal government has been years in the making.

The KRG started exporting oil directly to world markets from its fields through the Ceyhan port in Turkey in 2013.

The independent oil sales infuriated the Iraqi government, led by then Prime Minister Nouri al-Maliki. Baghdad cut off the Kurdistan Region from its 17 percent federal budget share in 2014 while war against the Islamic State raged and Iraqi IDPs and Syrian refugees flocked to the Region for safety, sending the Region into a deep financial crisis.

The budget cut remained in place until the beginning of 2018, under Prime Minister Haider al-Abadi, who just gave a small percentage of the Region’s share of the budget to the Region.

    The KRG was able to secure a more favorable 2019 budget bill with current Iraqi Prime Minister Adil Abdul-Mahdi, widely seen as an ally of Kurds.
In return for 12.67 percent share of the federal budget, the KRG was supposed to handover 250,000 barrels of oil per day to SOMO. Failing to do so would give the federal government the right to cut an amount of the Region’s budget share corresponding to the amount of the oil not handed over.

The federal government has overlooked the KRG’s failure to deliver the oil. Erbil has claimed that contractual arrangements and debts to oil companies prevented the handover.

Two months of anti-government protests in Iraq’s south and center have rendered Abdul-Mahdi’s tenure precarious. KRG officials have moved with increased urgency to lock in a favorable budget share agreement in case any potential successor is less hospitable to Kurdish concerns.

“We relayed our perspective concerning the 2020 budget bill to the Iraqi side… we presented some projects concerning the topic of Kurdistan Region’s oil and budget [share], its financial entitlements, and the budget of the Peshmerga forces,” Khalid Shwani, KRG Minister of Federal Affairs told reporters after the meeting on Monday.

Kurdistan Region will have representatives in a committee established to formulate the budget bill. This is a first for Erbil, as previous bills were prepared exclusively by federal government.

Some aspects of Monday’s agreement have yet to be set in stone, including the exact percentage of the Region’s share of the budget. The KRG is pushing for a return of the pre-2014 17 percent federal budget share. Also unclear is who will pay for operation costs of companies operating the Region’s oil fields.

https://www.rudaw.net/english/middleeast/iraq/25112019
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Mon Dec 09, 2019 11:26 pm

Oil trail reveals Turkey
funding Syrian Kurdish rivals


At the Halifax Security Forum, an annual event attended by high-powered government officials, business titans and assorted other movers and shakers from across the globe, national security adviser Robert O’Brien took the stage with PBS’ Nick Shifrin and let the cat out of the bag. When the veteran correspondent grilled O’Brien Nov. 23 about President Donald Trump’s decision to keep US troops in northeastern Syria “for the oil,” noting that the Pentagon’s Syrian Kurdish allies were selling it to the Syrian regime in defiance of sanctions, O’Brien responded, “Some of it goes to the regime. Some of it is used locally. Some of it goes to Iraqi Kurdistan. Some of it goes to Turkey. The key, though, is not where the oil goes but where the revenue goes.” The main thing, he concluded, was to ensure that none of it got to the Islamic State.

It is by now well established that the US-backed Syrian Democratic Forces (SDF) has been involved in selling oil produced in fields in eastern Syria mainly to regime-held areas. But trade with neighboring Iraqi Kurdistan and Turkey has rarely been reported and the parties involved, including the United States, have sought to keep it that way. For one, it flies in the face of US sanctions. But for Turkey, it's even more awkward.

As matters currently stand, Turkey, through oil, is helping to indirectly subsidize the very same Syrian Kurdish administration that it's seeking to crush on the grounds that it poses a threat to Turkey’s national security. Turkey’s successive military offensives against the Syrian Kurdish People’s Protection Units (YPG), which forms the backbone of the SDF, have cost hundreds of millions of dollars in treasure and at least 100 Turkish soldiers’ lives. So why is it beating the Syrian Kurds with one hand while feeding them with the other? The main reason appears to be profit. The others are leverage over the Syrian Kurds, and — according to Iraqi Kurdish officials — pressure from the United States.

But there are growing signs that Turkey’s laissez faire attitude may be changing, part of an all-out effort to bring the YPG and its Turkish affiliate, the Kurdistan Workers Party (PKK), to their knees. Russia, which is leaning on the Kurds to reach an accommodation with the regime, knows that it's more likely to do so if financially squeezed.

In a series of interviews conducted over the past year with current and former US, Iraqi Kurdish and Syrian Kurdish officials and with well informed sources with close knowledge of the oil trade, Al-Monitor learned that oil, mainly from fields in Rmeilan, Syria’s second largest field, and Qaytaniyah, near the Turkish and Iraqi borders, is being carried to Iraqi Kurdistan and then on to Turkey. These fields have been in Kurdish hands since 2012, when regime forces redeployed to fight Sunni rebels elsewhere. The sources spoke on condition of strict anonymity, citing the sensitivity of the topic.

A high-ranking Iraqi Kurdish official confirmed to Al-Monitor that “some” Syrian oil from the SDF-controlled fields is carried via Iraqi Kurdistan to Turkey. The Syrian oil is labeled as Iraqi Kurdish when going though the Habur border crossing with Turkey, an oil smuggler from Turkey’s southeastern town of Silopi speaking not for attribution told Al-Monitor. A second KRG official who corroborated the smuggler's account insisted that “most of the SDF oil goes to Turkey.”

“There’s some wheeling and dealing going on,” the first Iraqi Kurdish official acknowledged without elaborating.

Because of the secret nature of business with Iraqi Kurdistan and Turkey, Syrian Kurdish officials decline to formally confirm its existence. But nor do they deny it's going on. “The oil issue is burning us,” said an SDF-linked source who blamed Trump for exciting unwelcome interest in the trade.

Oil revenue is what sustains the Syrian Kurds’ autonomous administration, allowing it to pay the salaries of its civil and military arms. Control over the fields also strengthens the SDF’s hand in negotiations with the regime. “If we lose the oil revenue, our whole system will collapse; it's critical,” acknowledged an SDF-linked security official.

Oil revenues have grown even more critical since Trump froze some $200 million in stabilization funding for Syria in March 2018. The European Union in turn refuses to commit more money, telling the Americans, “We are either in with you or out with you.”

Cash injections from Saudi Arabia and the UAE amounting to $150 billion are due to run out early next year. SDF commander Mazlum Kobane’s mysterious visit to the UAE in late November is believed to be connected in part to a quest for further funds.

Wheeling and dealing

“We believe that around 300 tankers worth of oil goes to Iraqi Kurdistan per day,” a former Trump administration official told Al-Monitor. “The oil trade is shady. The deals are cut at the top then subcontracted. There are many middlemen. I would imagine that some of the oil ends up in Turkey.”

An Iraq-based oil analyst put the volume at 6-8,000 barrels per day. “The oil is very cheap. In July it was less than $20 per barrel while the world price was around $60,” he told Al-Monitor. Low prices make for huge profits.

The analyst continued, "We know that some oil that goes to Iraqi Kurdistan is sold to small, unlicensed refineries in Dohuk and Erbil. And most of the traders are somehow linked to KDP leaders in the same way that traders for the oil going to regime-held areas are connected to [Syrian President] Bashar al-Assad. And I wouldn’t be surprised if some of the Syrian oil ends up in Turkey because the oil traders from both sides are very well connected with government officials from both sides.” KDP is the acronym for the Kurdistan Democratic Party led by the powerful Barzani family.

The Iraqi Kurdistan Region’s president is Nechirvan Barzani, who in his earlier stint as prime minister oversaw the KRG’s oil business, most notably a landmark deal with Turkey in 2013. The agreement, which has been fiercely criticized for its opacity, allowed the Iraqi Kurds to sell their oil independently of Baghdad via a purpose-built pipeline running to export terminals in Ceyhan on Turkey’s southern Mediterranean coast.

The deal escalated tensions between Erbil and Baghdad, which is suing Turkey in the International Court of Arbitration for its role in the affair. It's impossible to prove, but a fair amount of oil is believed to go to Israel. In July, a senior Israeli official told Al-Monitor that the KRG was currently its biggest supplier of crude.

There are conflicting accounts of how the oil gets to Iraqi Kurdistan. A second former Trump administration official who spent time in Syria said it was trucked. “There were shitloads of trucks,” he told Al-Monitor.

On a recent morning at the Fish Khabur customs complex, there were no tanker trucks in sight.

A reporter’s attempt to follow a skinny pipeline that ran along the road to the Sahela crossing to Syria, which lies roughly five kilometers (three miles) south of the main crossing at Fish Khabur, was interrupted by an armed Iraqi Kurdish border guard, who told her, “This is a military zone. You have no business here. Now go.”

Open-source intelligence mined by Al-Monitor, and as first observed in October 2019 by the researcher known as @obretix on Twitter, revealed that one of the pontoon bridges connecting Fish Khabur to the Semelka crossing on the Syrian side features a makeshift pipeline. This pipeline runs across the southern bridge, where it connects to an oil depot on the KRG side consisting of 22 storage tanks. Some tankers do use the bridge, however. (Read our full report here.)

Oil for access

An SDF official told Al-Monitor that tanker trucks that cross over the pontoon bridge typically carry Iraqi Kurdish crude to coalition forces in Syria.

Long before the Trump administration took over, the US-led coalition had been tacitly condoning oil sales to Iraqi Kurdistan. But in the early days of the Syrian uprising, the KRG was squeezing access through the Fish Khabur border crossing and charging high taxes on goods going into Syrian Kurdistan, also known as Rojava. The hostility stemmed from its poor relations with the YPG and pressure from Turkey.

The State Department did not respond to Al-Monitor's request for comment on O'Brien's remarks.

Turkish officials did not respond to Al-Monitor's requests for comment

The United States brokered a deal whereby the Syrian Kurds would sell some of their oil via the KRG in exchange for unfettered access via Fish Khabur, which is their lifeline for humanitarian and commercial goods as well as military assistance from the US-led coalition. “Getting the deal done was key to keeping Fish Khabur open. The KDP-YPG deal on oil allowed us to keep everything smooth,” a former US government official told Al-Monitor. “But it was never publicized,” the official noted.

In a recent research note, the International Crisis Group observed, “YPG leaders believe that a continued US presence at the [Rmeilan] oil field in al-Hasaka will compel Washington to keep a land supply route open” through Fish Khabur.

“For Washington, control of the crossing would ensure a steady supply line from US military depots in Iraq. Loss of the crossing would severely harm the local economy, end foreign stabilization and humanitarian funding, and render the YPG more dependent on Damascus.”

When the Islamic State controlled oil fields in parts of Al-Hasakah and most of Deir ez-Zor, Turkey’s President Recep Tayyip Erdogan was accused of personally benefitting from what was a thriving multi-million-dollar trade at the time. A hacktivist group known as Redhack hacked the emails of his son-in-law Berat Albayrak, the country’s current finance minister and former energy minister. The most damning messages in the leaked trove pertained to Powertrans, an energy company that was granted a monopoly on trucking Iraqi Kurdish oil to Turkey before the KRG pipeline became operational. Albayrak denied any connection to Powertrans, but the dump exposed 32 messages with the keyword “Powertrans” in which he appeared to be providing advice on personnel decisions for the company.

Turkish media outlets claimed that Powertrans mixed IS-produced oil into their shipments to Turkey, though they provided no evidence.

In November 2015, after Turkey downed one its fighter jets, however, Russia jumped in with its own claims that Turkey was buying IS oil and circulated satellite imagery that purportedly proved it. Briefing the foreign media shortly after, Russia’s deputy Defense Minister Anatoly Antonov charged that Erdogan was personally involved “in this criminal business.” Erdogan issued an angry denial. When Turkey and Russia kissed and made up, the allegations disappeared.

A Barack Obama administration official involved in Syria policy told Al-Monitor at the time they had no proof that the Turkish government was directly engaged in any commercial activities with IS.

Oil for peace

But Syrian oil was making its way to Turkey, a Turkish official linked to the intelligence community noted in written comments relayed to Al-Monitor. Starting in July 2012, the YPG began allowing oil sales to Turkish companies via the towns of Kobani, Qamishli and Afrin, prompting the Syrian government to accuse Turkey of “stealing” Syrian oil.

The first former Trump administration official reckons that around 100 tankers currently carry oil from SDF-controlled fields to the Turkish-run Euphrates Shield zone in Jarablus.

But the Turkish official said that direct sales to Turkey proper halted when peace talks between Ankara and the imprisoned PKK leader Abdullah Ocalan collapsed. Peaceful cohabitation with the Syrian Kurdish administration, including oil, was meant to have been part of a grand bargain that would have ended the PKK’s 35-year-old armed insurgency against the Turkish state. Yet, lucratively cheap Syrian oil is still making its way to Turkey via the KRG.

Merve Tahiroglu is the Turkey program coordinator at the Project for Middle East Democracy, a Washington-based think tank, who has written extensively on the IS oil trade. She told Al-Monitor, “Open source information on IS smuggling indicates that the oil passed through Kurdish-held territories in Syria and Iraq before reaching Turkey. Regardless of the oil’s origin and how many times it changed hands, it appears to have come to Turkey through Kurdish middlemen and smugglers. This is all part of the war economy we’ve been tracking along the Turkish-Syrian border."

Tahiroglu acknowledged that the same smuggling networks may well be in play for sales to Turkey via the KRG. “Erdogan will likely deny these reports lest they hurt his political image. That said, Erdogan controls most of the narrative in Turkey thanks to his tight grip on the media. He is able to get away with such political scandals thanks to his outsized power to influence public opinion.”

A Turkish turn

Trump’s decision to maintain troops to protect the SDF-run oil fields has upset Turkey's calculations. Its game plan is to unravel the Syrian Kurds’ self-governance project and for as long as they have the means to finance and defend themselves under US protection, this cannot materialize.

Turkey’s hawkish security establishment recalls how the Iraqi Kurds began building their quasi-independent statelet throughout the 1990s on the back of oil that was smuggled to Turkey in large quantities in breach of UN sanctions. Ankara turned a blind eye. Assorted Turkish military and police officials were widely reported to have benefited.

The last thing Turkey wants, however, is a second Kurdish entity, much less a PKK-friendly one, as it sees things, on its borders. Hence, perceived national interest in this case is poised to trump personal profit, and Turkey is seriously weighing putting the kibosh on the trade even though comparatively it is vastly more modest by all accounts, according to a well-informed source familiar with the Turkish government's internal debates.

The message was reportedly relayed to KRG Prime Minister Masrour Barzani during his recent meeting with Erdogan in Ankara. “The Americans are sure to push back,” the first Iraqi Kurdish official predicted, saying Turkey had acquiesced to the trade under American pressure to begin with. Turkey’s recent behavior plainly indicates, however, that it no longer cares. It bought Russian-made missiles despite threats of US sanctions and invaded northeastern Syria, triggering a fresh cocktail of sanctions bills.

Ominously, the spokesman for Erdogan’s Justice and Development Party, Omer Celik, took a thinly veiled swipe at Trump today, saying, “To claim rights over resources belonging to the Syrian people is colonization.” He railed at Washington’s plans to guard the oil fields so that the SDF may continue to benefit from oil revenues, claiming, “This proves yet again that they are on the side of the terrorists, not the Syrian people.”

Russia has been far blunter. Its Foreign Minister Sergey Lavrov said the US plan to protect the oil was “tantamount to robbery” and warned the Syrian Kurds that relying on the United States “won’t bring any good.”

For Russia, any Turkish move that deepens the rift with the United States and forces the SDF/YPG’s hand in its talks with the regime is welcome. Curbing the oil trade results in both. Should the regime become the Syrian Kurds' sole customer, it will push prices even further down.

Nicholas Danforth is a senior visiting fellow at the German Marshall Fund of the United States. He told Al-Monitor, “From Moscow and Damascus’ perspective, this would be a more helpful way for Turkey to put pressure on the YPG than continuing its military operations on Syrian territory.”

But there are signs that Russia and the regime may already be taking matters into their own hands

A series of mysterious airstrikes on makeshift oil refineries and oil tankers around al-Bab and Jarablus, reported by Russia’s RT, may be the opening salvo in a campaign to pressure the SDF. The RT report was picking up on a Nov. 26 story by Syria’s government news agency SANA, which quoted an unnamed “field source” who had investigated “Kurdish organizations in Syria’s Jazira area” who were smuggling oil via Jarablus “as well as [via] northern Iraq, to the Turkey regime —which the Kurds claim as their main enemy.” SANA asserted that the source had “emphasized that strict measures will be taken against any smuggling operations of stolen oil from Syrian land to outside Syria.” Neither RT nor SANA mentioned who was responsible for the strikes. But Sunni opposition rebel commanders pointed to Russia.

https://www.al-monitor.com/pulse/origin ... sales.html
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Tue Dec 10, 2019 9:31 pm

Gulf Keystone in Kurdistan

London-based Gulf Keystone ‘on track’ to meet production goals in Kurdistan Region

The Sheikhan block, which Gulf Keystone has invested in, located in the Kurdistan Region province of Duhok.

Independent oil and gas operator Gulf Keystone said on Tuesday that it was on course to meet its production goals for 2019 at an oilfield in the Kurdistan Region.

In a statement on its website, Gulf Keystone revealed that its average gross production up until Nov. 30, 2019, at the Sheikhan Field in the autonomous Kurdish region was 32,127 barrels of oil per day (bpd). In November alone, the average gross production at Sheikhan was 40,582 bpd, it added.

Gulf Keystone Petroleum “is, therefore, on track to meet its original gross production guidance for 2019 of 32,000-38,000 bpd,” the statement read.

Regarding corporate matters, the London-based oil and gas operator posted a cash balance of $206 million as of Dec. 9.

The company said it had “confidence in its delivery of the Sheikhan project” and would initiate a second share buyback program for an additional $25 million, starting on Tuesday.

In January, Gulf Keystone announced that the company would step up operations in the Kurdistan Region’s Sheikhan field to 55,000 bpd.

Read More: Gulf Keystone says oil production to reach 55,000 barrels per day in Kurdistan

Despite not meeting that goal because of further drilling operations, CEO Jón Ferrier lauded the “significant progress” Gulf Keystone had made in the Kurdistan Region in 2019.

“We are pleased to confirm that we are on track to achieve our initial average production guidance for 2019,” Ferrier was quoted as saying in the statement, adding the company remains “on course to achieve further significant production growth in 2020.”

In June 2013, Gulf Keystone commenced commercial production operations and, subsequently, crude oil export sales at two production facilities at the Sheikhan block, which are currently capable of producing 40,000 bpd.

Gulf Keystone has said in the past that it believes oil reserves at Sheikhan are around 639 million barrels.

https://www.kurdistan24.net/en/economy/ ... 51b1ffce10
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Sat Mar 28, 2020 3:34 pm

US grants Iraq 30-day waiver
to import Iranian gas


The United States has granted Iraq another waiver - the shortest yet - to import energy from Iran, despite ongoing tensions between Washington and Tehran

Ahmed Musa, spokesman for Iraq’s electricity ministry, told Iraqi state media outlet INA on Friday that Iraq has been granted a 30-day waiver to continue importing Iranian gas and electricity.

“Despite no official letter being sent to Iraq’s electricity ministry from Washington regarding the recent waiver, Washington agreed to extend the waiver for Iraq to continue importing gas and electricity from Iran,” Musa said.

This is the seventh and shortest waiver Iraq has received since the US reimposed sanctions on Iran in November 2018, after Washington withdrew from the Joint Comprehensive Plan of Action (JCPOA), also known as the 2015 Iran nuclear deal, in May 2018.

The purpose of the waivers is to give Iraq time to gradually reduce their reliance on Iranian electricity and energy imports.

Iraq has suffered from severe power shortages since the 1990s, worsened by decades of war, sanctions and terror attacks – leaving Iraqis at times with just five hours of electricity per day.

To make up for the shortage in electricity production, Iraq has been importing electricity and gas to power its electricity stations from neighbouring Iran, much to the ire of Washington.

However, Washington’s patience seems to be running out, granting a much shorter waiver of 30 days, in contrast to the usual 90 or 120.

Iraq was granted a 45-day waiver last month, on the condition it would diversify its energy sources.

However, Musa revealed that Iraq has failed to do so due to the ongoing coronavirus pandemic, as well as budget cuts, leaving the US to grant Iraq a seventh waiver.

"This is the final extension," one source at the Iraqi president's office told AFP, adding that Washington is frustrated with Iranian interference in Iraq as Baghdad struggles to form a government.

In early January, the ministry announced a deal with Gulf countries to import 500 megawatts of electricity.

Musa confirmed to Rudaw English in early March that the imports will begin by October 2020.

Iraq made other deals with Western companies last year, such as Honeywell, Siemens, and General Electric in order to develop Iraq’s frail electricity infrastructure, demonstrating to Washington that Baghdad is keen to shift away from Iranian gas imports.

However, Iran still exports 1200-1500 megawatts of electricity to Iraq on a daily basis, in addition to 38 million cubic meters of natural gas to feed several of Iraq’s power stations, Sayyid Hamid Hosseini, a member of the Iran-Iraq Joint Chamber of Commerce confirmed in September 2019.

Electricity shortages have pushed protesters to take to the streets, especially in the summer of 2018, to demand better electricity and services.

As Iraq is slowly approaching summer time, the demand for electricity in the country is rising, and it is expected that Iraq will continue importing Iranian gas, with calls for more waivers here to stay.

https://www.rudaw.net/english/middleeast/iraq/270320201
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Fri Apr 03, 2020 10:24 pm

As oil prices fall how
will Iraq pay the bills?


As crude prices plunge, Iraq's oil sector is facing a triple threat that has slashed revenues, risks denting production, and may spell trouble for future exports

With global oil prices falling to around $25 per barrel, Iraq faces a significant challenge as oil is the country's only major industry. The price crash means Iraq's monthly crude revenues were slashed by nearly half from February to just $2.99 billion in March.

Iraq relies on oil revenues for more than 90 percent of state expenditure. Its 2020 budget was based on an estimated barrel price of $56, more than twice the current rate.

The second-biggest crude producer in the OPEC oil cartel, Iraq pays international oil companies (IOCs) about $3 billion quarterly to extract its crude. With oil so cheap, the government is desperately looking to cut costs and delay payments.

Last week, the Basra Oil Company – the state-owned firm coordinating production in the oil-rich southern province – asked IOCs to accept a delay in six months' worth of payments and cut work budgets by 30 percent, according to letters seen by AFP.

"A delay in first quarter payments is necessary, and we asked for the second quarter just in case," said Khaled Hamza Abbas, BOC's assistant director and a signatory to the letter, telling AFP that oil companies had yet to respond.

But IOCs are already making their own plans. Oil superpower ExxonMobil has asked sub-contractors to "reduce overall cost" with other firms asking suppliers for discounts – meaning to buy less in a time where global demand is at a perennial low. "IOCs are cash-strapped," a source at the main operator in the south told AFP.

But the trouble does not stop there. IOCs expense Iraq at the end of each quarter for what it cost to extract crude, and the Iraqi government pays them in oil. "With the lower prices, the government would have to use virtually all its crude to pay oil companies and would have barely enough to sell," a senior Iraqi official said in an interview.

How is coronavirus affecting production?

The spread of the novel coronavirus hasn't halted oil production, but it has severely disrupted it. Work rotations depend on rotations of skilled foreign nationals at Iraq's oil fields, and with some staff returning home, producers could see a drop in the usual 4.5 million barrel per day (bpd) production.

The Gharraf field in Dhi Qar province, which has produced up to 100,000 bpd, is offline after last month's evacuation of dozens of Malaysian workers by operator Petronas over COVID-19 fears, according to a source at the province's state-owned oil company.

Most foreign oil workers live on the fields in Basra, and are currently stuck there beyond their normal six- to eight-week rotations due to travel bans. To stem the spread of the highly infectious respiratory illness, Iraq has shut its airports and imposed a countrywide lockdown until at least April 19, although many expect an extension.

"We're seeking approvals for an exemption for foreign staff so that we can secure the rotating teams. These companies have internal rules and you can't keep the teams here for more than two months," said BOC's assistant director, Abbas.

A source from a major European oil firm operating in Basra told AFP a halt to foreign staff rotations would be a bigger threat to production than payment delays.

Britain's BP, too, would have to trim production if 4,000 British nationals working in the south could no longer travel.

"There are no two ways about it," a source with knowledge of BP's operations told AFP.

Who will buy Iraqi oil?

The third threat is a global drop in oil demand for the first time in a decade, with the International Energy Agency expecting 2020 demand to decrease by 90,000 bpd, a sharp downgrade from forecasts it would grow by more than 800,000 bpd.

"It has no equal in the history that we see such a strong decline in demand and a huge massive overhang of supply at the same time," IEA director general Fatih Birol told AFP.

Two countries facing shrinking demands are India and China, where Iraq sells "the lion's share" of its crude, according to geopolitical analyst Noam Raydan.

China, where the COVID-19 strain first emerged, is struggling through a huge economic slump and India just entered a three-week lockdown.

April would be a make-or-break month, said Raydan, but the outlook is bleak considering Iraq's main rival in Asian markets, Saudi Arabia, intends to flood the oil market this month just as OPEC production limits expire.

"Countries are stocking up on cheap oil. So even if we don't feel it now, the real problem will come in the next months when no one is buying," the Iraqi official said.

https://www.rudaw.net/english/middleeast/iraq/03042020
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Re: Kurdistan Oil & Gas Development

PostAuthor: Anthea » Tue Apr 28, 2020 3:07 pm

Baghdad cutting KRG
budget to punish Kurds


Baghdad is withholding the Kurdistan Regional Government (KRG)’s share of the Iraqi federal budget to “punish” the Kurdish people, Prime Minister Masrour Barzani told the United Nations special representative to Iraq during his visit to Erbil on Monday

In a statement following his meeting with UNAMI chief Jeanine Hennis-Plasschaert, the KRG prime minister lashed out at Baghdad for using the Region’s share of the budget as a “political trump card”.

“The federal government should not use the matter of salaries and the financial entitlements of the Kurdistan Region as a political trump card to punish the people of the Region,” Barzani told Hennis-Plasschaert, according to the KRG statement.

On April 16, Iraq’s caretaker Prime Minister Adil Abdul-Mahdi called on the finance ministry to halt budget transfers to the KRG and to take back all transfers made since January 1, 2020.

Baghdad said the KRG has failed to deliver its quota of 250,000 barrels per day (bpd) of oil to the state marketing firm SOMO in exchange for its share of the budget.

Erbil has not delivered a single barrel of oil since the agreement was reached in December. However, Barzani called the move “politically motivated”.

“The decision to cut the Kurdistan Region’s budget, half of which goes to civil servants, is politically motivated and against the people of the Kurdistan Region,” Barzani added.

Hennis-Plasschaert was in Erbil to discuss several burning topics with KRG officials, including the formation of a new government in Baghdad and the Region’s response to the coronavirus outbreak.

UNAMI is likely providing external mediation in the renewed Erbil-Baghdad confrontation.

Monday’s meeting was also attended by Dr. Adham Rashad, representative of the World Health Organization (WHO) in Iraq, who has supervised the national response to the coronavirus outbreak.

According to the KRG statement, Hennis-Plasschaert commended the KRG’s “unprecedented” response to the pandemic.

She also met with health minister Saman Barzanji and minister of state Khalid Salam Saeed.

A separate statement on the UNAMI Facebook page confirmed Hennis-Plasschaert and Barzani discussed the Erbil-Baghdad tensions but did not elaborate on the substance of the discussion.

The oil-for-budget agreement between the KRG and the Iraqi federal government had been years in the making.

The KRG started exporting its oil independently of Baghdad via its own pipeline to the port of Ceyhan in 2013.

The independent oil sales infuriated the Iraqi government of Nouri al-Maliki, which cut the Kurdistan Region’s share of the federal budget from 17 percent to zero in 2014.

The move coincided with the outbreak of war with the Islamic State group (ISIS), a massive displacement crisis, and the collapse of world oil prices, which coalesced to plunge the Kurdistan Region into financial crisis.

The Region has been steadily recovering since former Iraqi PM Haider al-Abadi reinstated a portion of the KRG’s budget in late 2018 and Abdul-Mahdi secured a bigger lump sum under the 2019 budget.

In return for its 12.67 percent share of the 2019 federal budget, the KRG was supposed to send SOMO 250,000 bpd, but has consistently failed to do so, claiming contractual arrangements and debts owed to foreign oil companies prevented the handover.

The arithmetic behind the December deal has no doubt been shaken in recent months by the ongoing political crisis in Baghdad, the collapse of world oil prices, and the economic slowdown sparked by the pandemic.

Iraq depends on oil sales for 90 percent of its state revenues. Painful austerity measures are expected if Baghdad is to weather the financial storm.

https://www.rudaw.net/english/kurdistan/270420201
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