From the Field
KRG still open to oil deal with Baghdad
ERBIL, June 15, 2016 – The Kurdistan Regional Government (KRG) has not ruled out the possibility of a future revenue-sharing agreement with Baghdad, a government spokesperson said late on Tuesday.
A deal with the federal government would see the KRG return to selling its oil through Baghdad’s Oil Marketing Company in return for 17% of the federal budget, a scheme that broke down in 2015 amidst collapsing oil prices.
“If Baghdad comes and says ok, give me all the oil that you have and I’ll give you the 17% as per the budget, which equals to [USD] 1 billion, I think, logically it should be the thing to accept,” spokesperson Safeen Dizayee said in Erbil.
Dwindling oil revenues have put a strain on the KRG’s budget, and the regional government has had difficulties paying its civil servants and the international oil companies producing in the Kurdistan Region of Iraq. Payments to operators Genel Energy, DNO and Gulf Keystone have since February been based on the companies’ contractual entitlements in an effort to rekindle investment.
Speaking on the condition of anonymity, a high-ranking government adviser told TOGY in June that the KRG had begun paying three more oil companies for their oil exports, with a fourth to be added in a few weeks’ time.