Major Discrepancy in Kurdistan Oil Figures
Posted on 16 March 2012
Oil exports from the Kurdistan Region in Iraq have been averaging 90,000-100,000 barrels per day in 2012, from fields at Taq Taq, Tawke, Khormor and Khurmala.
However, the Ministry of Oil spokesman in Baghdad has made repeated claims that only 65,000 barrels per day are being exported from the Kurdistan Region. He claims that the federal government is suffering daily financial losses as a result.
If the Oil Ministry’s claims are correct, this means that between 25,000-35000 bpd are being lost in the process of SOMO (the State Oil Marketing Organisation) receiving oil from the Kurdistan Regional Government and taking it to market. The KRG believes that this discrepancy should be investigated immediately in case somebody is creaming off the difference between the oil received and the oil sold.
Responsibility for any shortfall in federal revenues from KRG oil exports lies fully with the Ministry of Oil and the federal government in Baghdad for failing to meet their obligations and honour their payment commitments to the KRG.
During negotiations for the 2012 Iraq federal budget, the government in Baghdad asked the KRG to commit to export levels of 150,000 bpd. The KRG instead offered to export 175,000 bpd provided that payments to contractors were honoured without interruption.
This has not happened. No payment has been made by the federal government since May 2011. It owes the KRG more than $1billion for revenues accrued in 2011. Furthermore, not a single dollar has been received for exports in 2012.
The 175,000 bpd target is possible and the Region could even increase to 250,000 bpd, but only if the federal government honours its payment agreements. Otherwise, even the 90,000-100,000 barrels per day currently being exported will decline and eventually cease.