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The oil-rich autonomous region of Kurdistan has scheduled its long-awaited independence referendum for September 25, President Masoud Barzani said in a tweet. The referendum may cost Iraq a large chunk of its oil reserves.
The region of Kurdistan is made up of three provinces that are run by an autonomous government. Perhaps the most sensitive point geographically is the city and region of Kirkuk: control over it is still disputed with the central government in Baghdad, not least because the area contains some of the biggest oil fields in the country. The Kirkuk region will be included in the referendum, a government official told Reuters.
The Kirkuk field alone contains some 8.7 billion barrels of crude, with a daily rate of production back in 2015 of 300,000 bpd.
Tension between Erbil and Baghdad has been more or less permanent on the topic of Kirkuk oil and Kurdistan oil in general. At the moment, the Kurdistan Regional Government gets a share in Iraqi budget spending in exchange for a solid part of the oil it produces. Yet the KRG has more than once made it clear it would like to keep a bigger portion of the oil output for itself and have greater control over it.
Earlier this year, for example, Kurdish security forces seized an unspecified facility in Kirkuk as a way of protesting against Baghdad’s oil policy. The event led to a temporary suspension of oil flows from the surrounding fields.
Naturally, the central government is not on board with any sort of independence for Kurdistan and more specifically Kirkuk, with Ammar al-Hakim, president of the ruling coalition, telling Reuters back in April that Baghdad will not support an independence referendum. “We believe that the politics of accomplished facts and drawing borders with blood hasn't succeeded in any country of the world and won't have good results in Iraq either,” he said at the time, adding that Baghdad will insist on a dialogue on the matter.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.