Baghdad withholds oil funds, Arbil says

ARBIL - Agence France-Presse

President Masoud Barzani’s administration in northern Iraq wants Baghdad to pay promised oil income.

The regional administration in northern Iraq claimed on March 15 that the central Iraqi government had not handed over months of promised oil income while the region’s leader said officials in Baghdad were vindictive “failures”.

The charges were the latest in a long-running dispute over energy contracts and revenues between authorities in Baghdad and in the Kurdistan regional government (KRG).

The KRG and the central government have squabbled over payments, revenue sharing and Baghdad’s refusal to recognize the dozens of oil contracts Arbil has signed with international energy firms.

On March 15, the Kurdish regional government posted a statement on its website insisting it could increase its production to 175,000 barrels per day (bpd), but Baghdad “owes the KRG more than $1 billion for revenues accrued in 2011.” “Furthermore, not a single dollar has been received for exports in 2012.” 

 The statement accused the federal authorities of “failing to meet their obligations and honor their payment commitments to the KRG.” 

It said the region could produce up to 250,000 bpd, “but only if the federal government honors its payment agreements. Otherwise, even the 90,000-100,000 barrels per day currently being exported will decline and eventually cease.” 

KRG confirmed in May 2011 that Iraq had paid oil contractors in the autonomous region as part of an “interim agreement on revenue allocation.”