Iraqi commandos survey Fauqa Oilfield in Maysan province. Photo: AFP
By Samia Zuber
ERBIL, Kurdistan Region – Iraqi Prime Minister Nuri al-Maliki’s State of Law Coalition has rejected a Turkish proposal for an escrow account to monitor Iraqi oil revenues and resolve a pending payment issue between Baghdad and Erbil.
“Iraq is a sovereign country and it does not seek counseling from foreign countries for distribution of its revenues,” said Khalid Saadi, an MP from the State of Law Coalition. “Iraq has laws to settle these issues,” he added.
Last Saturday, Turkish Energy Minister Taner Yildiz proposed a mechanism to end the long-standing dispute between Iraq and its autonomous Kurdistan Regional Government (KRG) over the sharing of oil revenues. Yildiz said that he discussed the issue with Iraq’s Deputy Prime Minister for Energy Affairs Hussein Shahristani, but has not yet heard back from him.
“The distribution of the revenues would be carried out by Iraq, we would only hold these deposits at a Turkish state bank," said the Turkish energy minister.
Saadi said that Yildiz’s proposal would only lead to further deterioration of relations between Baghdad and Ankara.
After two years of strained relations over Syria, Sunni populations in Iraq and Kurdistan energy deals with Ankara, Iraq and Turkey mended relations earlier this month through exchange visits by their respective foreign ministers.
The Iraqi parliament has failed to pass the Hydrocarbon Law, which has been languishing since 2007 over disagreements between Kurds, Sunnis and Shiites.
Meanwhile, Farhad Atrushi, a member of the Iraqi parliament’s Oil and Gas Committee, expressed doubt that Baghdad would ever agree to Turkey's proposal. “Article 112 of the Iraqi constitution allows the KRG to run its oil affairs,” he argued.
That article of the Iraqi constitution allows the federal government, in cooperation with the producing regional government and governorates, to manage oil and gas extraction. It also allows the right to distribute revenues “in a fair manner in proportion to the population.”
Atrushi concurred with Saadi that the distribution of Iraqi revenues is an Iraqi internal matter, but believed that other stakeholders should be taken into consideration. “Undoubtedly, this is a domestic matter, but Turkey is still a party in this issue because Kurdistan’s oil pipelines go through Turkey. In addition, the biggest Turkish oil company has investments in Kurdistan’s oil sector,” he said.
Atrushi maintained that the Kurdistan Region should not be treated like another province. “The region has been governing itself for years,” he noted.
The KRG demands that Baghdad pay the fees for international oil companies operating in Kurdistan, which it says amount to $5 billion.
Over such disputes, the KRG has halted exporting some 100,000 barrels per day since December 2012 through Iraqi-Turkish pipeline that are managed by the central government.