Jul 27, 2010

Iraqi Kurdistan: Baghdad and Erbil dispute over resources

The Kurdish Regional Government in Iraq has been accuses of exporting oil illegally in a dispute with the central government. Baghdad claims that it has the sole authority to handle exports and should receive all revenue from it.

Below is an article published by the Wall Street Journal:

The Iraqi federal government in Baghdad Sunday [July 25] accused the semi-autonomous government of Iraq's Kurdistan region of exporting crude oil and oil products "illegally" and urged them to declare the amounts and the revenues obtained from these sales.


"We ask them to declare the amount of exported oil as it was announced by their [Kurdish] minister of natural resources," Iraq's federal oil minister Hussein al-Shahristani told reporters in Baghdad.


Shahristani said any crude oil exports should be handled by the central government in Baghdad and all revenues should go to "Iraq's federal treasury."


A statement on the Kurdistan Regional Government's website last week quoted the region's minister of natural resources, Ashti Hawrami, as saying that the KRG was selling crude oil and oil products through legal conducts.


The Kurdish minister confirmed in the statement that surplus oil products from the region's refineries are available for export and that the KRG exports these products through specialized companies and legal channels after charging a customs fee.


Hawrami's remarks came in response to recent news reports that there was a growing illicit trade in crude oil and refined products from Kurdistan to Iran in defiance of U.S. sanctions.


Shahristani said all these exports should be handled by the federal oil ministry in Baghdad and specifically by the State Oil Marketing Organization, or SOMO. According to the Iraqi constitution, revenues from these oil sales should go the federal treasury, not to the KRG.


KRG officials couldn't be reached for comment.


Baghdad and the KRG are at loggerheads over a handful of production-sharing agreements that the Kurds had concluded with several companies. The federal government in Baghdad argues that these deals are illegal because they haven't been approved by the Baghdad authorities, while the Kurds say that they are in line with the constitution.