ERBIL, Kurdistan Region – Despite falling oil prices that have severely hit Iraqi revenues, the autonomous Kurdistan Regional Government (KRG) will receive its full 17 percent of the budget, the head of the Iraqi parliament’s oil committee said.
“Erbil will receive 17 percent of the national budget in reality and not just in theory, and this order will remain even in the future,” Ahmad Chalabi told the Iraqi Oil Report news website this week.
Last month, the Iraqi cabinet approved a $102.5 billion budget for 2015, based on a projected oil price of $60 a barrel and a projected deficit of $19.1 billion. But oil prices have dropped from around $100 last year to less than $50 this month.
According to the Iraqi constitution, the KRG has a right to 17 per cent of total Iraqi revenues, although Kurdish officials say they have received less in the past.
Erbil struggled to finance its expenses through direct oil exports, after the then Iraqi prime minister Nouri al-Maliki withheld the KRG’s share of the budget, practically through the whole of 2014.
Baghdad and Erbil agreed in November to resolve differences, signing a deal that restored the budget payments to the KRG.
Under the agreement, the KRG will facilitate the export of 300,000 oil barrels per day (bpd) from Kirkuk’s oil fields, in addition to 250,000 from KRG-controlled oil wells.
“We expect to export 550,000 bpd through Kurdistan Region pipelines and it is vital for our economy,” Chalabi said. “The agreement asks the KRG to export 250,000 bpd (from Kurdish oilfields) under the condition that the Iraqi government receives the revenues,” he added.
The oil is exported via a pipeline network that connects the Kurdistan Region to the Turkish port of Ceyhan.
Iraqi Oil Minister Adil Abdul Mehdi predicted on Monday that oil prices would rise again in the second half of 2015, warning that ”they will not return to 2014 levels.”
Baghdad has agreed to export 375,000 bpd to Turkey until April, boosting that volume 550,000 bpd thereafter.
