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Rudaw

Interview

Premier Barzani Exclusive: Oil Sales Begin in May

By Hiwa Jamal 28/4/2014
Kurdistan Region Prime Minister Nechirvan Barzani. Photo: Rudaw
Kurdistan Region Prime Minister Nechirvan Barzani. Photo: Rudaw

The beginning of May, Erbil will start selling its stored oil in the Turkish point of Ceyhan – with or without Baghdad’s consent, Kurdistan Region Prime Minister Nechirvan Barzani declared in an important and wide-ranging exclusive with Rudaw. “We will sell it. That is our decision.”

Asked if Erbil could afford to go it alone, even if Baghdad cut off budget payments that pay the salaries of civil servants in Kurdistan, the premier added: “I assure everyone that we can pay out the salaries without Baghdad.” He said that, after recent actions Baghdad has taken against Erbil over the oil issue, there is little trust left between the two. “Baghdad would cut our oxygen if they could.”

Kurdistan’s importance, the premier explained, is growing internationally. “The Kurdistan Region is about to become a place that provides energy for the world,” he said. About the US role as a mediator between Erbil and Baghdad over the oil row, Barzani said: “America is encouraging both sides to reach an understanding. This is America’s true policy. It doesn’t force one side upon the other.”

The prime minister, who in his leadership capacity in the Kurdistan Democratic Party (KDP) is also in final negotiations for a new Kurdistan Regional Government (KRG), confirmed that the continued delay in announcing a new cabinet is over insistence by the Patriotic Union of Kurdistan (PUK) that it must have the Interior Ministry. “We do not want the PUK to stay outside the government, and we will do our best to have them in the new cabinet,” he said. “We haven’t reached an agreement. They insist on that ministry and we insist that they join the cabinet, which shows a great deal of patience on our part.”

  The best means to carry us through is the unity of all groups in Kurdistan. 

Regarding relations with Turkey, Barzani said that Erbil recognizes its important neighbor’s importance. “Turkey for us is the gateway to the West,” he said.

Returning to the issue of Kurdish oil exports, and whether selling oil independently was a step toward Kurdish independence, Barzani said:  “This requires the patience and endurance of the people and political parties of Kurdistan.” He warned: “If in Kurdistan, as political parties and people, we are not united and do not have one voice on this issue, we won’t be able to succeed. The future of the Kurdistan Region is tied to this subject.” He added that, “Up to now, we haven’t talked of separation. We only intend to use these resources for the well-being of the people of the Kurdistan Region who deserve it.”

Here is an edited transcript of Rudaw’s exclusive interview with the Kurdish prime minister:

Rudaw: What kind of government are you hoping to form?

Nechirvan Barzani: Taking into account the current circumstances in Kurdistan and Iraq today, we aim to form an inclusive government that would help us work in the next four years on improving our institutions. Since 1991, we have gone through different phases and now by all accounts we want the new cabinet to be in a shape that would allow us all to work together to preserve and advance our achievements and draw a common agenda.

Rudaw: Was it this same understanding that made other parties, particularly the opposition, join the government?

Nechirvan Barzani:  Yes, that was the case. However, opposition means someone who opposes you; it doesn’t mean an enemy. Some of them have decided to stay as opposition, but we believe that Kurdistan at this stage and the next four years requires us all -- the opposition and ruling parties -- to work together to fulfill the big tasks that lie ahead of us, such as the issue of oil and the changes sweeping the region. The best means to carry us through is the unity of all groups in Kurdistan.

  We hope the PUK participates in the government, and that is our intention. 

Rudaw: The leader of the Change Movement (Gorran), Nawshirwan Mustafa, said that they want to pass four calm and stable years. Was there a message in this for you?

Nechirvan Barzani: When we visited Mr. Mustafa he confirmed that his movement would want to be in the government. But four calm years doesn’t mean there will be no issue in Kurdistan. It rather means all sides agree on one agenda and work together to implement it in the next four years. That is why members of the KDP negotiation team, who were with me during the visit, also read Mr. Mustafa’s words positively. We concluded that it was a new beginning and that we can work together.

Rudaw: If the Patriotic Union of Kurdistan doesn’t join the government, do you think you can pass four calm years together with Gorran?

Nechirvan Barzani: We hope the PUK participates in the government, and that is our intention. The PUK is an important element in this country and has its own weight. We do not want the PUK to stay outside the government, and we will do our best to have them in the new cabinet.

Rudaw: Why does the PUK think they have been cheated out of the government posts?

Nechirvan Barzani: I believe the PUK raised the expectations of its people in the very beginning. But we have talked about it -- the 18 parliamentary seats they won. And I think they had better accept our offer. We (the KDP) have five ministries, and we have offered them five.

Rudaw: You have a Strategic Agreement with the PUK, but they feel that the KDP is not treating them based on that agreement.

Nechirvan Barzani: When it was signed, the Strategic Agreement was a great achievement for the people of Kurdistan. That agreement spared us countless troubles, and we could work together and win great things in Baghdad. Our achievements didn’t certainly match up to our ambitions, but with the PUK we managed to achieve a great deal.

Rudaw: But has the agreement come to an end now?

  Our achievements didn’t certainly match up to our ambitions, but with the PUK we managed to achieve a great deal. 

Nechirvan Barzani: We haven’t sat down to say it is over. But we can say a new phase has begun that needs a different reading. We have been working with the PUK thus far, but perhaps it might be necessary to also reach some similar deals with other groups that would gather us all under one umbrella.

Rudaw: Where do negotiations with the PUK stand now?

Nechirvan Barzani: They insist on getting the Interior Ministry. That is the issue. We understand their position well, but they do not compromise on that demand. The Interior Ministry is the reason we haven’t reached an agreement. They insist on that ministry and we insist that they join the cabinet, which shows a great deal of patience on our part.

Rudaw: You said earlier that no ministry is less important than another. So why don’t you give the Interior Ministry to the PUK?

Nechirvan Barzani: The posts have been decided already, but it has not been finalized yet that the PUK will or will not get the Interior Ministry. We have different views on that issue. The KDP wants to keep the Interior Ministry because the PUK has the security department. And the Peshmarga Ministry has gone to Gorran. However, the discussions between us and the PUK are still going on.

Rudaw: Are you willing to give the PUK the Ministry of Natural Resources instead?

Nechirvan Barzani: We do not have red lines with the PUK over any ministry. We can talk on everything, but it all has to be based on understanding.

Rudaw: Let us talk about the issue of oil and gas with Baghdad. Why is it so complicated?

Nechirvan Barzani: There are two sides to this issue. The first one is about the oil that was extracted in Kirkuk and other parts of Kurdistan and sold for purchasing bombs and weapons to use against the Kurdish people. And we believe that after 2004 a new era has begun in Iraq. We had a new constitution which around 80 percent of Iraqis voted for. The rights of the Kurdistan Region were established in that constitution, which President Barzani and other Kurdish parties worked for tirelessly. Then, after 2004 and the approval of the constitution in a referendum, we tried to practice our constitutional rights. When the constitution was being drafted President Barzani, Mr. Nawshirwan Mustafa, Mr. Jalal Talabani and the Kurdish parties went over every word of it to make sure that we can say we have --  and we are practicing -- those rights today and we will not compromise.

I also understand that when a people demand their constitutional rights they will face problems. This is where the complications start. We have constitutional rights which we want to practice, but in order to do that properly we have taken it to the Kurdistan parliament and approved it there, too. Based on that we have negotiated with foreign companies to come and invest in Kurdistan. We carried out that stage and the companies came.

  We have constitutional rights which we want to practice, but in order to do that properly we have taken it to the Kurdistan parliament and approved it there, too.  

They say that we had started with small companies. That is true. But in the end some of the biggest international oil and gas companies arrived and are now working in Kurdistan. But Iraq’s policies have undergone three stages: First they said that we were exaggerating; second, they blacklisted companies that worked in Iraq and Kurdistan; third, they said “it is alright that you have extracted oil, but you cannot export it.” In short, Baghdad always means to use the oil and gas as a trump card against the Kurdistan Region.

Rudaw: Which policy was wrong regarding oil and gas: That of the Kurdistan Region or Iraq’s?

Nechirvan Barzani: I believe we have followed a right policy, practicing our constitutional rights. In 2005-2006, and after I returned from Baghdad, I knew that Baghdad means to use this issue as a card against the Kurdistan Region. They didn’t want us to have our independent electricity system so that they could cut it off whenever they wish. But in 2006-7 we drew an independent strategy for power and fuel. Back then I told Mr. Ashti Hawrami, who was assuming the post of minister of natural resources, to do something that would make the Kurdistan Region -- in terms of electricity, power and fuel -- independent. We did everything based on that plan.

Rudaw: Is it unconstitutional to sell oil other than through the State Oil Marketing Organization (SOMO)?

Nechirvan Barzani: No, it is not unconstitutional. It is quite constitutional. No part of the constitution says that only SOMO has the right to sell oil. There is no such thing.

Rudaw: Then that means the issue is transparency and how it is sold.

Nechirvan Barzani: No, on the contrary. Baghdad isn’t saying anything about transparency.

Rudaw: Baghdad says that you have turned off the measuring gauges.

Nechirvan Barzani: This has to be explained to everyone: We haven’t turned off the gauges. You cannot hide how much oil goes through. There is no such thing. The Ministry of Natural Resources has published in great detail -- and in three languages, Kurdish, Arabic and English -- the data of its oil sales. All these doubts are meaningless. How transparent do they want the KRG to be when it publishes on its official websites all its oil deals from the time of Dr. Barham Salih’s government?

  How transparent do they want the KRG to be when it publishes on its official websites all its oil deals from the time of Dr. Barham Salih’s government? 

Rudaw: If you have control over export and sales, are you willing to send the revenues to Baghdad?

Nechirvan Barzani: We have told Baghdad that we keep control, but in a transparent process. What is transparency? It is how oil is produced, and how and at which price it is sold in the world market. We said that we will be with them in the whole process. In the end we keep the Kurdistan Region’s share, let’s say 17 percent, and then remit the rest to Baghdad.

Rudaw: Experts and research centers say that, at the speed and amount that oil is produced today, it will one day run dry. Have you thought of the future generations and what they might do when there is no more oil?

Nechirvan Barzani: It is all hypotheses. The Kurdistan Region is about to become a place that provides energy for the world. Oil is not only about marketing, its political side is important, too. In that regard, we have elevated Kurdistan’s political position. Today, the Kurdistan Region needs to strengthen its political stature. If we look at things from another angle, had we not done all this, we would have had to sit and wait for Baghdad’s mercy -- for Baghdad to say you are doing this wrong and doing that right, we will send you this and not send you that. We would be constantly in trouble with Baghdad, which would oblige us to compromise. In my view it is better if we maintain economic independence, even with an amount smaller than what is there today.

Rudaw: It is often said that Kurdish leaders want to use oil as a means to gain independence. Is something to this effect on the agenda?

Nechirvan Barzani: We haven’t walked in that direction yet, but oil isn’t a business item only. It certainly is political, too. Since we started in 2005-6 the Kurdistan Region has become a supplier of energy, and major companies such as ExxonMobil, Gazprom, Total and Chevron are in Kurdistan. If they aren’t sure that Kurdistan has political and constitutional grounds, there is no way they would take the risk of coming to Kurdistan to invest.

Rudaw: Oil is now being exported to Turkey daily. What is the amount?

Nechirvan Barzani: We have so far exported 1.5 million barrels. This oil goes to the Ceyhan Port, where it is stored in some tanks set aside for Kurdistan’s oil, but still part of Iraqi storage. There, computers show how much oil has entered and been stored. It is not that you can turn off the measuring gauges. We have stored the oil there and haven’t sold it yet.

  The Kurdistan Region is about to become a place that provides energy for the world.  

Rudaw: The Turkish energy minister says that they can only store 2 million barrels before it has to be sold. What is your plan?

Nechirvan Barzani: We will sell it. That is our decision.

Rudaw: Without Iraq’s consent?

Nechirvan Barzani: Yes,

Rudaw: Have you braced yourselves for selling oil without Iraq’s consent?

Nechirvan Barzani: Yes, and we already have paid the price for it. Kurdistan Region’s monthly budget hasn’t come from Baghdad since January. Usually, when the annual budget is approved, all government institutions and ministries receive their share, but the only part of the country that has received only a tiny portion of its share is Kurdistan. Our monthly salaries are 850 billion dinars, but we have only received 500 billion. We received the same amount in February. In March and April we got none. That is the price.

Rudaw: So can you run a government without getting the salaries?

Nechirvan Barzani: Yes, we can. We will pay the salaries. We went to Baghdad for talks, but they shocked us by cutting Kurdistan’s salaries. This would naturally cause delays in subsequent talks and how you best deal with it in the future. But I assure everyone that we can pay out the salaries without Baghdad, and we have done it so far. There was a little delay which emanated from the shock from Baghdad.

Rudaw: Let us talk about the Peshmarga forces. What are the disagreements with Baghdad over?

Nechirvan Barzani: Our issue with Baghdad is mainly over the budget. In 2007, when the Americans were still in Iraq, we had one whole year of negotiations with the Iraqis to recognize Peshmargas as part of Iraq’s defence forces. We reached an agreement, and all the documents are there as proof. All Iraqi groups accepted the protocol. The last thing left to be done was for the prime minister to put his signature to it. But I remember that, after one year of talks, the Iraqi defence minister said in a meeting that he was unaware of such an agreement. We said “no problem, let’s try again.” We tried one more year and reached another agreement. The issue is that they say providing the Peshmarga budget isn’t constitutional, and we say it is. Peshmargas are part of Iraq’s defence forces. If Peshmargas aren’t here today to defend Kurdistan as part of Iraq, Iraq will face serious security problems. That is where the dispute lies.

  If Peshmargas aren’t here today to defend Kurdistan as part of Iraq, Iraq will face serious security problems. 

Rudaw: But based on some communiqués I have seen, it appears that Baghdad has issues with numbers. They find the number of Peshmargas unreasonable.

Nechirvan Barzani: We told them that we are ready to agree on the figures, too. We have agreed on 70,000 Peshmargas. But the issue isn’t numbers at all. Otherwise we are ready to talk about it.

Rudaw: How about the relations between the Kurdistan Region and Turkey, which you visit regularly and see Turkish Prime Minister Recep Tayyip Erdogan?

Nechirvan Barzani: Turkey is an important neighbor of ours. We have hundreds of kilometers of border together. Our relations with Turkey have gone through many phases. Just a number of years ago, Turkey had stationed 200,000 troops on the border and was threatening to intervene in the Kurdistan Region. But today, we enjoy great relations in many fields. KRG’s policy is that we must have good relations with all our neighbors. In the past years we have proven that the Kurdistan Region is a factor of stability, and it is important to us that our neighbors see us that way. With Turkey, we have reached a common understanding. Turkey for us is the gateway to the West. Our trade with that country has witnessed great leaps. It is within this policy that we try to maintain good relations with Turkey and Iran.

Rudaw: Is that why you have allowed Turkey to occupy the Kurdistan Region economically?

Nechirvan Barzani: It is not something we have allowed; it is the reality. In Iraq, and in the Kurdistan Region in particular, no major strategic projects were ever carried out during Saddam Hussein. There were no major factories in this country, no infrastructure and no good roads. Our market is an open and competitive market. And there is Iran, Turkey and other countries. Iraq is a wealthy country that needs to be rebuilt. But after 2003 the Turks took the initiative in this regard and entered Kurdistan’s market. So did Iran. Meanwhile, we have to encourage our own private sector to the level of producing and exporting instead of importing everything from the outside.

Rudaw: What kind of oil agreement is there between the KRG and Turkey?

Nechirvan Barzani: For the first time Prime Minister Erdogan raised this subject and said, “We are ready to help you in the field of energy.” Back then, Turkey wasn’t quite ready to digest this issue. But they gradually understood that it is in our mutual interest. We negotiated for nearly two years until we reached an agreement and signed a protocol on energy cooperation between Turkey and the Kurdistan Region. This protocol allows the Kurdistan Region to export its oil to Turkey and the outside world.

  In the past years we have proven that the Kurdistan Region is a factor of stability, and it is important to us that our neighbors see us that way. 

Rudaw: Will the oil only be exported to the world market or to Turkey as well?

Nechirvan Barzani: The oil we export we will sell at an international price. If Turkey wants to buy it we will sell it to Turkey, or else we will sell it to other countries. Now, we have stored oil there and on May 2nd we will start selling it.

Rudaw: Is any special discount made to Turkey on the price of oil?

Nechirvan Barzani: Not at all. Unfortunately, some of our politicians speak of this matter in a way as if Turkey is playing a seditious game. But there is no basis for that. On the contrary, Turkey has always encouraged us to reach some sort of understanding with Baghdad, and we have done our best. But Baghdad would cut our oxygen if they could. They tie everything to Iraq’s sovereignty and territorial integrity. Yet in many countries oil is sold without the government’s knowledge, it is done by the companies. We have said to Baghdad that we abide by international standards and sell our oil at an international price through a transparent system, every step of which Baghdad will be with us.

The only thing we haven’t agreed upon is control over oil sales, which Baghdad insists should be only done by SOMO. And we say the Kurdistan Region wouldn’t accept that. And after they cut the salaries of the people of Kurdistan, we stress more than ever before that their suggestion isn’t acceptable, because what they are doing now could be repeated any time.

Rudaw: Exactly how much oil reaches Turkey through the pipeline everyday?

Nechirvan Barzani: Right now, very little. We have stored 1.5 million barrels, but if the barrels are fixed we expect to be able to send out around 200,000 barrels.

Rudaw: A study says that the Kurdistan Region could build the infrastructure in the next two years that would make it ready to declare independence.

Nechirvan Barzani: Yes, we certainly could. But this requires the patience and endurance of the people and political parties of Kurdistan. I hope this issue isn’t interpreted as a political party or personal interest. It is about the interest of every Kurdish person. If in Kurdistan, as political parties and people, we are not united and do not have one voice on this issue, we won’t be able to succeed. The future of the Kurdistan Region is tied to this subject.

  We only intend to use these resources for the well-being of the people of the Kurdistan Region who deserve it.  

Now, whenever we talk to the world of oil and gas, they listen keenly and want to know what the Kurdistan Region has to offer. The Kurdistan Region can by the end of this year -- relying on the infrastructure it has built -- bring up its oil production to 500,000 barrels a day. Within two years we can reach 1 million barrels. That is just oil. By then we will also have natural gas ready for export. Kurdistan has enormous gas reserves. What we say isn’t a fantasy. It is a reality, and we have it in Kurdistan. Up to now, we haven’t talked of separation. We only intend to use these resources for the well-being of the people of the Kurdistan Region who deserve it. This country has only seen destruction throughout history. We want to start a new beginning.

Rudaw: Can you also use the resources to gain independence?

Nechirvan Barzani: You cannot say “I will use this for independence.”  But my opinion is that, if the people of Kurdistan decided one day to declare independence, they will have to talk it over with Baghdad first. They will have to persuade Baghdad that we, as two people, cannot live together in this country, that we see it as in our interest to be independent. So I think this issue has to be discussed with Baghdad and solved through dialogue.

Rudaw: What is America’s position on Kurdistan’s oil exports?

Nechirvan Barzani: America is encouraging both sides to reach an understanding. This is America’s true policy. They are not forcing one side upon the other.

 

Comments

 
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Havalo Lolawo | 28/4/2014
This is great news. And if Baghdad interferes again, then simply block the water pipe again and don't let any of the Arabs come into the North, even if it's tourists. It's time the Kurds get out of the circus show in South Iraq and let them butcher one another.
K | 28/4/2014
At last! This is the first step towards independence. Well done, Mr. Prime Minister. But let us not only think about the next five decades when our oil will run dry, let us produce, build factories, sell us Kurdish produce. Create jobs for locals, force these people out of the public sector and into the private sector. When we are financially independent of Baghdad, and not totally dependent on oil, then we have nothing to fear.
Ozheen Ma. | 28/4/2014
Good job, interesting interview. "We only intend to use these resources for the well-being of the people of the Kurdistan Region who deserve it." I really hope you are being honest on this Mr Barzani and use the profit of the resources to build up the country. It would be a shame to see the money end up in the pockets of a few lucky one.
Muraz Adzhoev | 28/4/2014
In order to know what is the decision and the choice of the people there should be conducted a referendum in all provinces of South Kutdistan after the declaration of independence announced by the President. The final choice between confederation and full sovereignty, adopted by the people of South Kurdistan, can not be the subject for any discussions with Baghdad. Only in case, if the majority of the people vote for a confederation, negotiations between three sides would be possible. The declaration will unite the people of South Kurdistan, if not all the parties.
Muraz Adzhoev | 28/4/2014
10 years of missed opportunities in Iraq have already proved,that the ideological doctrine of ethno-religious dictatorship obviously continues to dominate. The Arab-Shiite political-Islamist elites have replaced the Arab-Sunni secular political-oligarchic elites. And this is exactly the main problem, which has nothing to do with the question about, who would become the prime-minister of Iraq. It does not matter whether Parliamentary elections will be or won't be held. Anyway the power will remained in the hands of the currently ruling elite. The dictatorship is inevitable, because federative Iraq is not viable system for peaceful co-existence and equal partnership. Even a confederative system is not an ideal version for Iraq, but it could be at least a stable framework for a union of independent republican states. So, it is time to ask, what is the will of the people of South Kurdistan. The referendum should be initiated by the Parliament and provided by the KRG according to the President's declaration on independence of South Kurdistan.
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