Biden Talks With Iraqi Kurdish Leader Barzani to Settle Kurdistan Oil Dispute

By Arti Bali – – 2.2.2014 – US Vice President Joe Biden met President Massoud Barzani and persuaded Kurdistan Regional Government in northern Iraq to work with Baghdad and the Turkish government to resolve differences over revenues of energy exports.

This is the second time that both leaders have spoken on oil revenue. The dispute between Iraq’s Kurdistan Regional Government and Iraq government intensified after KRG-Ankara agreement in which it agreed to export oil to Turkey without central government approval. Baghdad claims sole authority over Iraqi oil exports. However, Kurdistan says it has the right to sell the region’s oil independently.

The US official also reaffirmed Washington’s “strong” support for a “unified and federal Iraq as defined under the Iraqi constitution.”

Biden called the leader of Iraq’s Kurdistan Regional Government (KRG), Massoud Barzani, on Thursday, encouraging him “as he has done with leaders in Baghdad and Ankara, to find a common way forward on the matter of energy exports and revenue sharing.”

Iraq’s Oil Ministry expressed “deep regret and astonishment over sudden announcement by the Kurdistan Regional Government (KRG) to begin pumping oil to Turkey without central government approval.. KRG’s new pipeline carries the oil to Turkey’s Mediterranean export hub of Ceyhan. Iraqi oil minister threatened legal action against Ankara because according to the central government in Baghdad, Kurdistan has violated the constitution and a UN Security Council resolution that requires Iraq to coordinate its oil policies with the United Nations, which can charge 5 per cent of its revenue to pay for damages caused during the 1990 invasion of Kuwait.

Biden stressed the importance of close US cooperation with the Kurdistan Regional Government and with Iraq’s government. Aware of the fact that Iraq’s economy is in danger of collapsing without Kurdish oil revenues.

The Kurdish Regional Government is bypassing the federal pipeline to export oil to Turkey, thus avoiding payments to the central government. The Kurds exported 61,000 bpd of crude via the Baghdad-controlled pipeline to Turkey in 2012 and the related revenue went directly to the central government. In 2013, exports rose to 250,000 barrels per day, but payments were blocked due to a legal dispute over the payment of oil and gas companies operating in the north of the country. Both Biden and Massoud Barzani discussed efforts to fight terrorism in Iraq. Iraq’s government has said it intends to create three new provinces in an apparent attempt to address Sunni grievances and counter the expansion of the Kurdish self-rule region.