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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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Is This Oil Rich Iraqi Province About To Split Off?

Kirkuk conflict

Baghdad has been discriminating against the province of Kirkuk in northern Iraq and has not been paying its dues for oil revenues since 2014, so there is no logic for the disputed province to stay with Iraq, the governor of Kirkuk, Najmadin Karim, has said in an interview with the Voice of America’s Kurdish service.

The Kurdistan Regional Government (KRG) has paid its share of the so-called ‘petrodollars’ payment system to Kirkuk, whereas the Iraqi government has been withholding all payments to Kirkuk despite earlier agreements, the governor said.

The city of Kirkuk has not been included in the decision-making process regarding its own oil over the past decades, Karim noted.

According to Kurdish media network Rudaw, Iraq’s Prime Minister Haidar Al-Abadi has recently said that Iraq will not oppose a Kurdish independence referendum since “every nation is entitled to it as it is a right recognized by the international community”.

Last month Iraq reached an agreement with the KRG to resume crude oil exports from three fields in the Kirkuk area, which was estimated to add some 150,000 barrels per day to the total exported by OPEC’s second-largest producer. Oil pumped by Iraq’s North Oil Company from the Kirkuk fields is exported via a KRG-controlled pipeline. In March, Baghdad and the KRG had run into a dispute over payments for oil shipped via the pipeline, which led to the suspension of shipments.

And last week, Iraq and Kurdistan restarted joint exports of crude from the Kirkuk oil field, after the two parties had reached a preliminary revenue-sharing deal. According to shipping sources consulted by Reuters, revenues from Kirkuk’s oil trade would be split 50/50 between Iraq’s State Organization for the Marketing of Oil and Kurdistan under the new deal, though the agreement's final details will be sorted out during upcoming discussions between the Iraqi Oil Ministry and the KRG’s Natural Resources Ministry.

By Tsvetana Paraskova for Oilprice.com

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