Kurdistan Region Rejects Budget Allocation for Oil Companies

[Aslan]

ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) in northern Iraq insists it is owed at least 4 trillion Iraqi dinars ($3.5 billion) to cover the costs of oil companies operating in the autonomous enclave, rejecting an offer by Baghdad to double the current budget allocation of 750 billion dinars, an MP said.

Iraq’s parliament on Thursday passed the country’s 2013 budget, despite a boycott of the vote by Kurdish lawmakers. The budget earmarks 750 billion dinars for oil companies working in the Kurdistan Region, which include US giants Exxon Mobil and Chevron and Russia’s Gazprom.

Farhad Atrushi, an MP from the Kurdistan Alliance in the Iraqi parliament and a member of its oil and gas committee, said that Baghdad had offered to double the budget allocation to 1.5 trillion Iraqi dinars before the bill was passed.

“The central government proposed to pay 1.5 trillion Iraqi dinars now. Later, they will pay the rest if the price of oil rises. However, the Kurdistan Region rejected such an offer,” Atrushi told Rudaw. “Baghdad tries to deceive the Kurds about its commitment to pay the oil companies that work in the Kurdistan Region,” he accused.

The Kurds insist that the accumulated costs of oil companies operating in the enclave for the past three years exceed 4 trillion dinars.

The oil issue is at the center of a major row between Baghdad and Erbil. The Kurds insist they have a constitutional right to produce and export their own oil and gas, but Baghdad says contracts signed directly by the autonomous enclave are illegal.

Usama Jamil, an MP from the Kurdistan Islamic Union (KIU) in the Iraqi parliament, accused the Kurdistan Region’s oil policy of lacking transparency.

“The Kurdistan Region is not transparent in its oil policy, that’s why the central government insists on decreasing its budget share,” he told Rudaw.

“Baghdad first wants to see transparency in Kurdistan’s oil revenue before it gives money,” he said. “For the central government the issue is not the revenue itself, but how it is spent,” he added.

Meanwhile, Atrushi defended the KRG’s oil policy, saying it had used revenues to build infrastructure, while Baghdad had squandered it on arms deals and for political gain.

[Anthea]

Everyone sees the improvements SK has made. So they may not be perfect but given how deprived and war torn the area had become I think they have done extremely well and will probably do a great deal better if Iraq leaves control of Kurdish oil to the Kurds