MESOP : New oil deal Iraq & Kurdistan, Kurdish delegation to visit Baghdad for talks

February 2, 2015 – ERBIL/BAGHDAD,— A new oil agreement will be signed between the Iraqi government and the autonomous Kurdistan region, aiming to resolve the pending issues between both sides, Iraq’s Oil Minister, Adil Abdul-Mahdi, said Sunday, NRT TV reported.

“The agreement between Iraq and Kurdistan went well, and in the near future, a committee will be convened to resolve the remaining problems and a new agreement will be signed,” Abdul-Mahdi said. With regard to the budget deficit in Iraq’s newly approved 2015 budget, Abdul-Mahdi said that Iraq will decrease its deficit by relying on other sources of income besides oil revenue.In January, Iraqi Prime Minister Haider al-Abadi stated that the 40 percent drop in oil prices since last year had been “disastrous” for Iraq’s economy, which he said was 85 percent oil-based. In December, the Iraqi government and the Kurdistan Regional Government (KRG) signed an oil agreement due to take effect at the start of 2015.

Under the deal, the two sides agreed to the export of 300,000 barrels per day (bpd) of oil from Kirkuk and 250,000 bpd from the northern Kurdish region through Turkey.Meanwhile the head of the Kurdistan Islamic Union party KIU in Iraq’s parliament, Musana Amin, told NRT that a Kurdish delegation will go to Baghdad to negotiate and activate the oil accord between Baghdad and Erbil, which was signed in December. Iraq’s Kurdistan region was obliged to sign such an agreement because it wants to be independent, and Iraq wants to have control of all the Kurdish oil production, Amin added.

He also stated that the Iraqi parliament’s Energy Committee will visit Kurdistan next week and will have a meeting with the Kurdistan Regional Government’s (KRG) minister of natural resources.On Sunday, the heads of the Iraqi parliament gathered to hold discussions with Kurdistan Prime Minister Nechirvan Barzani and Kurdish ministers on the consensus with Baghdad.

The agreement allows for Kurdistan to export 550,000 barrels per day (bpd) of oil, with 350,000 (bpd) coming from the disputed city of Kirkuk and the remaining 250,000 bpd from the Kurdistan region.However, the KRG has said, “The Kurdistan government is burdened with Iraqi requests because we have to sell the oil to the companies that we are in debt with.” “We will follow the agreement as it is, but we cannot give 550,000 barrels of oil per day to SOMO (State Organization for Marketing of Oil). We will send it annually,” the statement added. On Jan. 20, Iraqi Oil Minister Adil Abdul-Mahdi said that the Kirkuk oil refineries would see an upsurge in oil production to 600,000 barrels per day (bdp) as of April 2015.He also detailed a plan to export 375,000 bpd from Kirkuk and the Kurdistan region in the first three months of 2015.