Page 4 - MEOG Week 11 2021

MEOG COMMENTARY MEOG

Baghdad continues to

wait for Kurdish oil

Despite having said it was ready to implement the draft budget agreement, the Kurdistan
Regional Government is yet to send any crude to the federal government in Baghdad.

IRAQ THE Iraqi government is yet to receive any Baghdad, Qubad Talabani, said that the semi-au-
crude from the Kurdistan Regional Govern- tonomous region was “ready to implement all
ment (KRG), according to the Minister of Oil its obligations with the federal government,
WHAT: (MoO) in Baghdad despite preliminary agree- whether by providing 250,000 barrels per day of
The Iraqi federal ment having been reached on the 2021 budget crude oil or exporting non-oil resources through
government has in December. the region’s outlets, in accordance with the Iraqi
complained that the Undersecretary to the MoO, Hamid Yunus constitution.”
Kurdistan region is yet to al-Zobaei was quoted by the Iraq News Agency Following the December draft agreement, he
transfer a single barrel of (INA) as saying on March 14 that talks were con- said that the issue of the budget was “in the hands
oil, though Erbil expects tinuing between Baghdad and Erbil “in the hope of [the Iraqi] Parliament, and we hope that we
its share of the budget. of reaching a bilateral agreement that serves the will reach a positive result with a fair and imple-
interest of the country”. mentable agreement”.
WHY: As with previous budgets, the KRG should Talabani said: “We are ready to implement
Issues appear to remain receive 12.67% of the total budget equating to this agreement”, noting that the federal gov-
between Baghdad and around $13bn, but there remain issues related to ernment in Baghdad had only paid the KRG its
Erbil relating to the budget payments to Erbil being contingent on it share during six months of 2020, with funding
transfer of oil across the handing over 250,000 barrels per day (bpd) of “intermittent” for three of these months.
regional border. crude to Iraq’s State Oil Marketing Organization However, Middle East Oil & Gas (MEOG)
(SOMO) and giving the revenues to the cen- understands that it may be more than willpower
WHAT NEXT: tral treasury. Apparently, growing increasingly that is preventing the KRG from making good
A vote is to be held on frustrated, the MoO noted that it has “ruled out on the transfer, with the administration under-
passing the 2021 budget dispensing with oil in the generation of electric stood to have entered into numerous long-term
this week. power in the future”. crude supply agreements for large portions of its
INA reported that Iraq’s budget deficit cur- oil production.
rently stands at 28.6 trillion dinars ($20bn). Separately, the deputy PM spoke of hopes
Meanwhile, Kurdish media agency Rudaw that federal oil apparatus could be overhauled
reported that the federal government would vote so as to also represent the KRG. “We hope to
on the budget this week. build a new oil and finance relationship with
In February, the KRG’s deputy prime min- the central government, and we have faith that
ister and head of a delegation negotiating with this will be achieved step by step, until we reach

P4 www. NEWSBASE .com Week 11 17•March•2021