Page 8 - MEOG Week 14 2021

MEOG FINANCE & INVESTMENT MEOG

Iraq passes $89bn

budget for 2021

IRAQ IRAQ last week approved its 2021 budget fol- As in previous budgets, the KRG will receive
lowing months of wrangling between the fed- 12.67% of the total, with this contingent on it
eral government in Baghdad and the Kurdistan handing over the net revenues from 250,000
Regional Government (KRG). bpd of oil exports to Iraq’s State Oil Marketing
The agreement pegs the 2021 budget at 130 Organization (SOMO) and giving the revenues
trillion dinars ($89.65bn) with the deficit esti- to the central treasury.
mated at 28.7 trillion dinars ($19.79bn). With the Kurdish oil exports have long been seen by
country 97%-reliant on oil exports, the budget is many in Baghdad as unconstitutional and in late
based on an oil price of $45 per barrel with total January, 113 MPs, most of them Shi’ite, wrote
exports averaging 3.25mn barrels per day (bpd). to the head of the parliament to ask that budget
This would represent a small reduction com- article 11 be redrafted to force Erbil to provide all
pared to the March export figures which the output to SOMO.
Ministry of Oil released this week. Iraq exported It suggested that section 2a of article 11
3.28mn bpd in March, down by 25,000 bpd from should read: “The Kurdistan region will abide by
February levels. sending 460,000 barrels of oil per day (BOPD)
This comprised 2.945mn bpd of federal to SOMO, and in case of overproduction, they
exports and 335,000 bpd from the Kurdistan abide by sending the excess amount to SOMO
Region. Data also showed that Iraq’s non-com- as well.”
pliance with OPEC+ production restrictions While the KRG was never likely to agree to
continued in February, though by only 11,000 this, Erbil has committed to a minimum produc-
bpd. tion level of 460,000 bpd.
After numerous voting delays and heated Having failed to approve the 2020 budget, the
exchanges between political factions, agreement news is a mark of progress for the fractious rela-
was reached on major stumbling blocks, pre- tionship between Baghdad and Erbil, with Shi’ite
dominantly the KRG’s revenues from oil exports lawmaker Wafa al-Shimmari saying it would
and non-oil revenues including customs fees and “help stabilise Iraq’s economy, draw investments
taxes. and pave the way for the country’s rebuilding”.™

P8 www. NEWSBASE .com Week 14 07•April•2021