Iraqi MP accuses KRG of ‘treason’ for failure to send oil

ERBIL, Kurdistan Region – An Iraqi MP has called national leadership silence over the Kurdistan Regional Government's (KRG) refusal  to send Baghdad 250,000 barrels per day (bpd) in exchange for its share of the federal budget “treason.”

 

Oday al-Awad, a Fatih alliance MP from Basra and a member of parliament’s oil and gas committee, said Iraqi Prime Minister Adil Abdul-Mahdi may need to use “force” to secure the oil quota, which had been settled upon by both Erbil and Baghdad in the 2019 budget agreement.

“Being silent on KRG exports of Iraqi oil is a national treason to all Iraqis that is being committed by the Kurdish leaders in the Kurdistan Region and the Iraqi Prime Minister Adil Abdul-Mahdi needs to prevent the stealing of Iraqi’s oil by the Kurdish leaders, even if that leads him to using force to implement,” Awad said Thursday in a Facebook statement. 

Iraqi lawmakers are piling pressure on Abdul-Mahdi’s government to implement the bill, accusing him of being too soft on the KRG, which is yet to send a single barrel of oil to Baghdad in exchange of its 2019 budget share.

Iraqi MPs have even urged the government to freeze the KRG’s share of the budget until oil deliveries are secured.

The KRG has been using revenues earned through its independent oil sales to clear its debts, which piled up in recent years after Baghdad cut its share of the federal budget to zero, global oil prices crashed, and the region was struck by war and financial crisis. 

“As an MP representing Basra province, I would ask the Iraqi government and Iraqi President what you would do if Basra exported its oil independently and did not send the revenues back to the Iraqi national budget? And I think we can do that as people of Basra if we want,” Awad added. 

MPs in the Kurdistan regional parliament say the Region’s budget share is locked in for 2019 and expect the KRG will implement its side of the bargain by 2020. 

Under the agreement, approved in January 2019, the KRG was granted a 12.67 percent share of the federal budget – short of its pre-2014 share of 17 percent – on the condition its sends its quota of oil to the state marketing body SOMO and delivers all revenues to the central treasury.

The agreement also insulated the salaries of Peshmerga forces and civil servants from political disputes.   

However, the KRG, which this week established a new cabinet, has so far failed to keep its end of the deal.

Speaking to Rudaw English on Sunday, Gulizar Rashi Haji, deputy head of the Kurdistan Region oil and gas committee, said the current budget share is secure and that the onus is on Baghdad to pay foreign oil companies before Erbil implements the deal.

“If the KRG hands over 250,000 bpd to Baghdad, then Baghdad needs to pay the foreign oil companies who operates in the Kurdistan Region because the KRG will not be able to pay them for their operations if it hands over 250,000 bpd to Baghdad.” Haji said.

“The KRG has signed an official and constitutional bill with Baghdad that cannot be cancelled or paralyzed by the Iraqi parliament at least until the beginning of 2020,” she added.

As parliament prepares to discuss the 2020 budget, lawmakers are concerned the KRG will again fail to keep its end of the bargain.

Iraq’s finance and oil ministers were called before parliament on Thursday to update MPs on the implementation of the bill. However, their appearance before parliament was postponed at the last minute for unspecified reasons. They will now face MPs on July 23.

The KRG began selling oil independently of Baghdad in 2013, leading then-PM Nouri al-Maliki to suspend the Region’s budget share altogether. 

When Peshmerga forces took control of security in Kirkuk in 2014, the KRG also took control of the province’s bountiful oilfields. 

When Iraqi forces retook these oilfields in October 2017, the KRG lost around half of its oil revenues. Oil exports via the pipeline linking the Kurdistan Region to ports in Turkey were suspended for several months.

Erbil-Baghdad relations have since vastly improved since Abdul-Mahdi took office, and exports have resumed. Although a smaller share than before, the Region is again receiving federal funding. 

If the KRG does not show it is willing to send even a portion of the oil quota to Baghdad, the Iraqi government may again cut its budget. 

Although Iraq is unlikely to use force, the events of October 2017 remain fresh in the minds of Kurdish leaders. 

If criticism of Abdul-Mahdi continues, MPs may remove him from office. His predecessor Haider al-Abadi, who took a more uncompromising approach to the KRG, recently hinted he would like to return to power.