MESOP REPORT : Baghdad owes more than $4 billion to oil companies in Kurdistan

23.04.2014 – Shwan Barzinji – BasNews, Erbil – When the Kurdistan Regional Government (KRG) announced that they would export 100,000 barrels of oil per day through the Federal Government without any pre-conditions, the Iraqi Acting Minister of Finance, Safa al-Din Al-Safi, said that the Federal Government had agreed to pay the money owed to oil companies working in the Kurdistan Region.

Safi said that according to the KRG, the money owed to the oil companies in the Kurdistan Region amounts to 18 trillion IQD, and that the Federal Government has decided to pay the amount in full. In this way, the Kurdistan Region’s 2014 budget from Iraq has been increased from 16 trillion IQD to 20 trillion IQD.

KRG Deputy Finance Minister Rashid Tahir told BasNews that one of the main reasons for the talks between the KRG and Baghdad was to agree on an additional 4 trillion IQD for oil companies in the Kurdistan Region to be included in the Region’s 2014 budget.

“We believe it was a good decision from the Federal Government, and it was one of the important points in our discussions with Baghdad,” said Rashid. He noted that Baghdad has not paid the oil companies working in the Kurdistan Region over the last two years, and that the amount – $4.2 billion – is a problem in itself. Due to technical problems, the export of 100,000 barrels of oil per day from the Kurdistan Region through Baghdad was delayed, said Rashid.

The Iraqi Deputy Finance Minister Fazil Nabi rejected the reports that the Kurdistan Region’s budget had been increased, saying the bill for the oil companies should be paid by the Federal Government.

Kurdistan Oil website editor Bilal Saaed told BasNews: “the bill owed to oil companies in the Kurdistan Region has amounted to $4.2 billion over the last two years. During this period, out of 1 trillion IQD, only 560 billion IQD has been given to the KRG for oil companies in the Kurdistan Region.’’ Saaed also pointed out that the amount of money that the KRG has asked for from the Federal Government is not much compared to the amount of oil exported, but it depends on Baghdad’s agreement whether the KRG agrees to export oil through SOMO Company. Member of the finance committee in the Iraqi parliament Najiba Najib said to BasNews: “What the financial minister of Iraq is saying is a tactic and deception. The four trillion Iraqi dinars should be given from Iraq’s budget, not the budget of the Kurdistan Region.”