Page 7 - MEOG Week 18
P. 7
MEOG Commentary MEOG
slump. Dara Rashid, the KRG planning minister, told a press conference in Erbil on Sunday the Kurdistan region is ready to deliver the oil quota to Iraq’s State Organization for Marketing of Oil (SOMO) in return for public finances.
“We are ready not only to hand over 250,000 barrels of oil per day to Baghdad, but also to hand over the entire KRG oil product. But in return, Baghdad must commit to sending all the financial shares of the Kurdistan Region and the entitlements of the oil companies operating in Kurdistan Region oilfields,” Rashid said.
Erbil has also agreed to abide by the Iraqi gov- ernment’s pledge to reduce oil production as part of the OPEC+ agreement to stabilise the strug- gling oil market and that Iraq’s 23% production cut would be proportionately mirrored in Kurd- ish crude output. This presupposes a 0.2-0.3mn bpd output reduction in the next two months, a painful commitment for a regional government that has tacitly suggested to oil companies that they should postpone overdue crude marketing payments by at least nine months, i.e. already into early 2021.
Interestingly, the crude volume to be cut by KRG is roughly equivalent with the 250k bpd that Kurdistan ought to be transferring to the federal government in exchange for Baghdad paying the regional government’s payroll. The Kurdish crude transfers have been an increas- ingly hot topic in the Iraqi federal Parliament as a group of representatives have filed an official complaint to Finance Minister Fuad Hussein, who happens to be an ethnic Kurd and has been generally seen as a dovish figure who could usher in a new era of more harmonious coexistence
between Baghdad and Erbil, accusing the federal ministry of misspending $5bn in 2019 of public money on subsidising KRG, which did not even transfer the promised 250k bpd.
Sheikh Janab, the KRG finance minister, told the same Erbil press conference on Sunday that Baghdad had ordered the KRG budget cut on April 16, but that a KRG delegation had travelled to Baghdad to smooth things over. “On April 16, a decision was issued to cut the payment of KRG employees’ salaries,” Janab said. “On April 19 we went to Baghdad, and after holding many impor- tant and sensitive meetings with the Iraqi gov- ernment we were able to reach a specific formula by sending a note from the General Secretariat to the Prime Minister to pay the salaries of KRG employees.”
The KRG delivered a memorandum to the office of PM Abdul-Mahdi on Thursday urg- ing him to pay the salaries of KRG employees, according to Janab. “However, Abdul-Mahdi still has not responded to our memorandum regarding KRG employees’ salaries, and we hope that his response will be positive,” Janab added. Negotiations appear to be ongoing behind closed doors.
Meanwhile, fears are growing of a major con- frontation between Kurdish factions in northern Iraq, as tensions continue to rise between Iraq’s Kurdistan Regional Government (KRG) and the Kurdistan Workers’ Party (PKK) over control of a strategic territory. The threat from IS, which although defeated maintains an underground presence in Iraq, has been seen in recent weeks, as militants have increased their attacks on Iraqi and Kurdish troops, and civilians.
Week 18 06•May•2020 w w w . N E W S B A S E . c o m P7
