Page 10 - DMEA Week 24 2021

DMEA POLICY DMEA

Kurdistan hails deal to

unlock budget payments

MIDDLE EAST KURDISTAN Regional Prime Minister Mas- fees and taxes.
rour Barzani this week said that a deal has been Articles 10 and 11 of the budget dictate Erbil’s
agreed between the regional government (KRG) share of the budget and have been the key areas
and Baghdad that will see budget payments to of issue.
Erbil resume. Kurdish oil exports have long been seen by
Writing on Twitter, Barzani said: “I spoke many in Baghdad as unconstitutional and in late
with Prime Minister Mustafa al-Kadhimi today January, 113 MPs, most of them Shi’ite, wrote
as part of our ongoing talks and shared commit- to the head of the parliament to ask that budget
ment to bring certainty to the Erbil-Baghdad article 11 be redrafted to force Erbil to provide all
relationship. I’m pleased to announce we’ve output to SOMO.
reached a deal that will see federal budgetary It suggested that section 2a of article 11
payments restored to the KRI and backdated to should read: “The Kurdistan region will abide by
January 2021.” sending 460,000 barrels of oil per day to SOMO,
He added that during the call “I thanked and in case of overproduction, they abide by
him for his leadership and the federal cabinet sending the excess amount to SOMO as well.”
for its support for this important milestone. We While the KRG was never likely to agree to this,
overcame this difficult, long-standing obstacle Erbil has committed to a minimum production
together.” level of 460,000 bpd.
In late March, Iraqi MPs approved the major- As in previous budgets, the 2021 budget pro-
ity of articles, allowing the 2021 budget to pro- vides for the KRG receive 12.67% of the total,
ceed following months of wrangling between with this contingent on it handing over the net
Baghdad and the KRG. revenues from 250,000 bpd of oil exports to
The agreement pegged the 2021 budget at Iraq’s State Oil Marketing Organization (SOMO)
IQD130 trillion ($89.65bn) with a deficit esti- and giving the revenues to the central treasury.
mated at IQD28.7 trillion ($19.79bn). With the Despite passage of the bill nearly three
country 97%-reliant on oil exports, the budget is months ago, Erbil has not received any payments
based on an oil price of $45 per barrel with total from Baghdad and has so far failed to provide
exports averaging 3.25mn barrels per day (bpd). SOMO with any crude.
After numerous voting delays and heated However, in mid-May, Kadhimi said that
exchanges between political factions, agree- relations between federal and regional authori-
ment was reached on major stumbling blocks, ties have entered a “golden era” and noted that
predominantly the KRG’s revenues from oil he and Kurdish leaders had worked to “bridge
exports and non-oil revenues, including customs an understanding between” them.™

P10 www. NEWSBASE .com Week 24 17•June•2021