Iraqi oil row lingers without any progress

ARBIL / LONDON

Iraq will take action, including fiscal measures, if the Kurdistan Regional Government (KRG) exports oil before an agreement is reached with Baghdad, Iraqi deputy prime minister said a day after the KRG prime minister claimed Iraq wanted Kurds to be their “oil porter.”

Speaking at a conference in London on Jan. 28, Iraq Deputy Prime Minister for Energy Hussain al-Shahristani reiterated that only Iraqi state marketer SOMO is authorized to export the country’s oil.
“Any oil that leaves Iraq without the permission of SOMO is illegal and Iraq will have to take action to protect its oil wealth,” Shahristani said. “We have informed Turkey and the KRG that we cannot allow this to continue... We are waiting for a response to our latest proposal.”

A day before Shahristani, the Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani has claimed Baghdad wants them only to port oil, asserting they wouldn’t accept this, Cihan News Agency reported yesterday.

“Baghdad tells us ‘Conduct porterage, hand the oil to us and we will sell wherever we want. We will send it to the Iraqi budget and use it against Kurdistan as a red card whenever needed,’” Barzani said, addressing Kurdish lawmakers of the Iraqi Parliament Jan. 27.

However, Barzani also stressed a disagreement between Baghdad and Arbil would be worked out according to constitutional principles, as Anadolu Agency reported.

Barzani also said the U.S., Turkey, and other neighboring countries supported oil exports of the autonomous region that is considering transporting its oil reserves to world markets via a pipeline to Turkey.

The KRG announced crude oil had begun to flow through the pipeline and exports were on track to start at the end of January, inviting bidders to register with the Kurdistan Oil Marketing Organization (KOMO), stirring the central Iraqi government’s opposition.

Baghdad rejected the situation as a violation of the constitution and on Jan. 15 reiterated that Iraq’s State Oil Marketing Organization (SOMO) had exclusive rights to sell crude from Iraqi Kurdistan and the rest of the country.

The KRG prime minister also denied claims that the Kurdish region’s oil was being sold under the market price, saying, “Not one drop of Kurdish oil will ever be sold for less than the standard price.”

Despite this, the central Iraqi government holds Turkey responsible for “smuggling oil out of Iraq,” as well, Turkey repeatedly said it has no intention of interfering with the issue it dubs as “an internal affair” of Iraq.