BAGHDAD: Iraq will not pay oil companies operating in Kurdistan because the autonomous region has failed to export the volume of crude it pledged, a spokesman for Hussain Al Shahristani, Iraq’s deputy prime minister for energy, said on Friday.
The comments ramp up a standoff between Baghdad and the region, which have been locked in a long-running spat over land and petroleum rights.
Tension appeared to ease in September, when Kurdistan and Baghdad struck a deal under which the autonomous region agreed to continue pumping its share of national oil exports in return for payment from the central government.
An export target of 200,000b/d has been set.
Following that agreement, Baghdad transferred an initial sum of 650bn Iraqi dinars ($560m) to the Kurdistan regional government (KRG), but a subsequent payment is now overdue and Kurdish crude exports this week dropped to around 5,000 barrels per day.
“The Iraqi side gave them the (initial) sum, but they haven’t supplied the 200,000b/d,” Faisal Abdullah said via telephone.
“The government fulfilled its obligations according to the agreement but Kurdistan shirked theirs,” he said.
In recent weeks, oil exports from Kurdistan have slumped from a peak of around 200,000 bpd. The reason for the reduction is not clear, but the region has previously halted exports in protest at Baghdad’s withholding of payments.
Reuters
