Reuters: Iraqi budget draft for 2014 created further disputes between Baghdad and Kurdistan
Reuters: Iraqi budget draft for 2014 created further disputes between Baghdad and Kurdistan
16 Jan 2014
Iraqi Kurdistan ministers walked out the cabinet session, with a protest at the drafted budget of Iraq for 2014. No wonder, this will further complicate the long running feud between the central Iraqi government and Kurdistan.
The Kurdistan Regional Government (KRG) said that crude had begun to flow through the pipeline, and exports were on track to start at the end of January, inviting bidders to register with the Kurdistan Oil Marketing Organization (KOMO).
However, Baghdad denied ratifying this export, marking it as illegal. It remarked that SOMO or Iraq’s State Oil Marketing Organization has the only exclusive rights to sell crude of the country.
The draft budget requires the Kurds to export 400,000 barrels per day (bpd) — well above the region’s current export capacity — and says Baghdad will deduct any shortfall from the 17 percent share of state revenues to which they are entitled.
However, it has to be noted that the primary budget draft has not been voted yet and it would undergo a few changes. Kurdish lawmakers said the draft sent the wrong signal ahead of planned negotiations over the long-running oil revenue dispute.
Kurdish lawmaker, Rawaz Khoshnaw, remarked, “It’s certainly a negative message Baghdad is sending by adopting the budget without agreement from the KRG,” and added, “The Iraqi government should have given more time for talks and negotiation with the KRG.”
Kurdish members of parliament boycotted last year’s budget, but it passed nonetheless.
A delegation led by Kurdish Prime Minister Nechirvan Barzani was due to visit Baghdad for talks to ease the dispute, which is rooted in disagreement over how to exploit Iraq’s vast oil resources and share the proceeds.
Previously, Kurdistan used to export its crude to Turkey through a pipeline controlled by Baghdad. But supply has been halted over a year due to dispute between Kurdistan and Baghdad over oil revenue sharing. Baghdad said it would not pay because the KRG had failed to meet an export target of 250,000 bpd.
Since then, the Kurds have been trucking smaller quantities of crude to Turkey and collecting the revenues directly, whilst laying their own independent pipeline, which was completed late last year.
Industry sources put current export capacity at around 255,000 bpd and do not expect that figure to reach 400,000 bpd until the end of this year or early 2015. Iraqi Prime Minister Nuri al-Maliki said the government had long since prepared the budget, estimated at 174.6 trillion dinars ($150.12 billion), blaming the Kurds for holding it up.
He remarked that missed export from the region has cost Iraq $9 billion revenue loss in recent years.
iraqdirectory.com
