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ERBIL, Kurdistan Region — A senior Kurdish politician on Sunday argued that the Kurdistan Regional Government (KRG) should reach a deal with Baghdad over the exchange of oil for its share of the federal budget, claiming that the resource has not been as economically valuable as they had hoped.
“A lot of money has gone to companies, a lot of money went to Turkey, and oil was sold cheap, so Kurds have not benefited economically from the selling oil as much as they intended,” Mahmood Othman, a former member of Iraqi parliament, told Rudaw’s Sangar Abdulrahman on Sunday.
“Kurdistan should review their oil dossier, not only for [the sake of] Baghdad, but for themselves too. They should be more transparent, and work toward achieving economic benefit for the Kurdistan Region,” said the former head of the Kurdistan Socialist Party. “In case they see that the advantage is not that big, they should come up with a deal with Baghdad so they can abide by with [State Organization of Marketing of Oil] SOMO.”
Control of the Kurdistan Region’s oil revenue has long been a thorny issue between Erbil and Baghdad. The KRG has operated an independent oil and gas sector since 2006 and later began exporting its oil to the international market via a pipeline through Turkey in 2013.
Years of tensions over the independent oil sales came to a head in 2014 when then-Prime Minister Maliki suspended the sending of the Kurdistan Region’s share of the federal budget – leaving hundreds of thousands of public sector employees with unpaid salaries.
That same year, the Peshmerga took control of security in the disputed territory of Kirkuk, allowing the KRG to also seize control of the province’s bountiful oilfields.
When Iraqi forces retook the area in October 2017, the KRG lost around half of its oil revenue, and the government was compelled to suspend exports via Turkey for several months.
In December 2019, Baghdad agreed to send Erbil a 12.67 percent share of the federal budget in exchange for 250,000 barrels of oil per day. However, neither side fully abided by the agreement, and the federal money was frozen again.
In regard to accusations that Shiite parties are not cooperating with KRG to reach a deal, Othman claimed that they have always tried to “reduce the authority of the KRG” and “increase the federal government’s control over the region’s revenue.”
“Apart from Ayad Allawi’s cabinet, every other cabinet that has come after it has tried to reduce the budget of the Kurdistan Region, reduce its authority and take over its oil sector,” Othman said. “It is true that many of these people were once allies with the Kurds, but their interest is more important to them, Iran’s influence is more important, and the idea of centralized power is more important to them, and that is why they are trying to reduce the power of the KRG politically, economically, and in terms of security.”
“Unfortunately the international community is not playing a great role in this matter, because in Iraq, countries like America and Russia do not have the real influence, but Iran does, and Iran’s relationship with the Kurdistan Region is not in the best position now,” he added.
Baghdad failed to pass a budget in 2020 because of political turmoil, record low oil prices, and the coronavirus pandemic. In November, Iraqi lawmakers passed the Fiscal Deficit Coverage Bill approving loans to cover civil servant salaries for the last two months of the year.
The bill passed with a majority vote, despite a walkout staged by Kurdish MPs angered that Erbil is obliged to hand over an unspecified amount of oil in exchange for funds – a clause they said was not in the original bill.
The 2021 budget bill was approved by Iraq’s Council of Ministers on December 21. Parliament has met twice to discuss the bill.
The Kurdistan Region’s share of the federal budget has attracted great opposition from Shiite MPs in the parliament.
On Saturday, more than 100 Iraqi MPs, mostly Shiite, signed a letter asking that the 2021 budget bill obliges the Kurdistan Region to hand over all its oil to the SOMO in exchange for federal funds.
“Iraq’s revenue is federal. The oil of Basra, the Kurdistan Region, and any other province shall be under the supervision of the Iraqi government, and the Kurdistan Region should abide by this,” Alaa Rubai, an MP from the Sairoon alliance - the parliament’s biggest political bloc, led by Shiite cleric Muqtada al-Sadr - told Rudaw’s Mustafa Goran on Wednesday.
KRG delegation, led by deputy PM Qubad Talabani returned to Baghdad today to finalize negotiations with Iraqi’ parliament parties and the financial committee, after not reaching a final agreement in their last visit earlier this month.
“A lot of money has gone to companies, a lot of money went to Turkey, and oil was sold cheap, so Kurds have not benefited economically from the selling oil as much as they intended,” Mahmood Othman, a former member of Iraqi parliament, told Rudaw’s Sangar Abdulrahman on Sunday.
“Kurdistan should review their oil dossier, not only for [the sake of] Baghdad, but for themselves too. They should be more transparent, and work toward achieving economic benefit for the Kurdistan Region,” said the former head of the Kurdistan Socialist Party. “In case they see that the advantage is not that big, they should come up with a deal with Baghdad so they can abide by with [State Organization of Marketing of Oil] SOMO.”
Control of the Kurdistan Region’s oil revenue has long been a thorny issue between Erbil and Baghdad. The KRG has operated an independent oil and gas sector since 2006 and later began exporting its oil to the international market via a pipeline through Turkey in 2013.
Years of tensions over the independent oil sales came to a head in 2014 when then-Prime Minister Maliki suspended the sending of the Kurdistan Region’s share of the federal budget – leaving hundreds of thousands of public sector employees with unpaid salaries.
That same year, the Peshmerga took control of security in the disputed territory of Kirkuk, allowing the KRG to also seize control of the province’s bountiful oilfields.
When Iraqi forces retook the area in October 2017, the KRG lost around half of its oil revenue, and the government was compelled to suspend exports via Turkey for several months.
In December 2019, Baghdad agreed to send Erbil a 12.67 percent share of the federal budget in exchange for 250,000 barrels of oil per day. However, neither side fully abided by the agreement, and the federal money was frozen again.
In regard to accusations that Shiite parties are not cooperating with KRG to reach a deal, Othman claimed that they have always tried to “reduce the authority of the KRG” and “increase the federal government’s control over the region’s revenue.”
“Apart from Ayad Allawi’s cabinet, every other cabinet that has come after it has tried to reduce the budget of the Kurdistan Region, reduce its authority and take over its oil sector,” Othman said. “It is true that many of these people were once allies with the Kurds, but their interest is more important to them, Iran’s influence is more important, and the idea of centralized power is more important to them, and that is why they are trying to reduce the power of the KRG politically, economically, and in terms of security.”
“Unfortunately the international community is not playing a great role in this matter, because in Iraq, countries like America and Russia do not have the real influence, but Iran does, and Iran’s relationship with the Kurdistan Region is not in the best position now,” he added.
Baghdad failed to pass a budget in 2020 because of political turmoil, record low oil prices, and the coronavirus pandemic. In November, Iraqi lawmakers passed the Fiscal Deficit Coverage Bill approving loans to cover civil servant salaries for the last two months of the year.
The bill passed with a majority vote, despite a walkout staged by Kurdish MPs angered that Erbil is obliged to hand over an unspecified amount of oil in exchange for funds – a clause they said was not in the original bill.
The 2021 budget bill was approved by Iraq’s Council of Ministers on December 21. Parliament has met twice to discuss the bill.
The Kurdistan Region’s share of the federal budget has attracted great opposition from Shiite MPs in the parliament.
On Saturday, more than 100 Iraqi MPs, mostly Shiite, signed a letter asking that the 2021 budget bill obliges the Kurdistan Region to hand over all its oil to the SOMO in exchange for federal funds.
“Iraq’s revenue is federal. The oil of Basra, the Kurdistan Region, and any other province shall be under the supervision of the Iraqi government, and the Kurdistan Region should abide by this,” Alaa Rubai, an MP from the Sairoon alliance - the parliament’s biggest political bloc, led by Shiite cleric Muqtada al-Sadr - told Rudaw’s Mustafa Goran on Wednesday.
KRG delegation, led by deputy PM Qubad Talabani returned to Baghdad today to finalize negotiations with Iraqi’ parliament parties and the financial committee, after not reaching a final agreement in their last visit earlier this month.
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