ERBIL, Kurdistan Region – Iraq’s autonomous Kurdistan Region has announced a major plan that would give it full control of its oil industry and create a monetary fund whose revenues would be directly shared with the enclave’s five million citizens.
Ashti Hawrami, minister of natural resources in the Kurdistan Regional Government (KRG), told Rudaw television last week that his ministry had sent two proposals to the Kurdistan parliament, one for the creation of the Kurdistan National Oil Company (KNOC) and the other for the monetary fund.
“Two separate draft proposals to establish (KNOC) -- and a monetary fund where its revenues would go -- have been sent to the Kurdistan parliament for approval,” Hawrami said.
“Its revenue will go directly to the Kurdistan citizens,” he said, adding that each family would end up receiving $1,200 once oil output targets hit one million barrels per day in 2015.
“The annual revenue for each family would be somewhere around US$1,200, if Kurdistan’s oil export rises to one million barrel per day,” Hawrami said. He advised citizens to invest their shares for the benefit of future generations.
KNOC would account for three percent of Kurdistan’s total oil revenues.
“The initiative pushes Kurdistan’s oil industry into a whole new level,” Hawrami said.
Hawrami’s announcement came in the midst of Kurdistan’s parliamentary election campaigns, in which the ruling Kurdistan Democratic Party (KDP) has secured the largest number of votes, according to early results from Saturday’s polls.
Hawrami said he hoped that the draft projects would be the next parliament’s priorities for discussion. He said he hoped that KNOC would attract more oil companies, train hundreds of Kurdish employees in oil-sector jobs and give the KRG complete control over its oil industry.
The proposed plan is likely to sour Erbil-Baghdad relations even further. Baghdad insists that Erbil does not have the right to sign direct oil exploration and sales contracts without the central government’s intercession. Erbil maintains it has the constitutional right, and has largely ignored Baghdad’s terse objections.
Hawrami said that the Kurdistan Region’s oil law has clearly mentioned the establishment of KNOC.
National oil companies play a significant role in developing local economies as well as their oil sectors. Oftentimes, they require technical support and skilled manpower and seek partnerships with big oil companies.
According to the United States Energy information Administration, NOCs account for 52 percent of global oil production and control 88 percent of proven oil reserves.
