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Iraq And KRG Agree To Split Kirkuk Revenues 50/50 And Fight ISIS In Mosul

Iraq and the semi-autonomous region of Kurdistan have restarted joint exports of crude from the Kirkuk oil field, after the two parties reached a preliminary revenue-sharing deal earlier this week, industry contacts told Reuters on Thursday.

The agreement came to fruition during recent meetings in Baghdad between high-level officials from Baghdad and Erbil, including Iraqi Prime Minister Haider al-Abadi and KRG Prime Minister Nechirvan Barzani.

One shipping source said that 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.

The officials also discussed the nearing operation for the liberation of Mosul and the future of the city and its citizens once the Islamic State has been removed.

“We have an initial agreement with the Kurdistan Region on the participation of all components in the Mosul liberation operation and the future administration of the city when IS is pushed out,” Salim al-Jibouri, the Speaker of the Iraqi Parliament told Kurdistan24.

The two sides agreed to coordinate attacks against the terrorist group in Mosul and will work together to return internally displaced persons to their homes, a joint statement by the Iraqi government and the KRG said.

Barzani presented a firm stance regarding the post-ISIS political future of Kurdistan at the meetings, Erbil spokesman Sami Argoshi said, though Saad al-Hadithi, al-Abadi’s spokesman, later said no official discussions on Kurdish independence took place.

A dispute between Baghdad and Erbil on the terms of a previous revenue-sharing agreement left the Kurdish Regional Government (KRG) the sole manager of Kirkuk’s oil - roughly 150,000 barrels per day - until March of this year.

The KRG shipped oil from the Kirkuk oilfield, as well as several other sites within its borders, to global markets via Turkey, independent of Baghdad’s export contracts.

By April, disagreements surrounding the terms of a new revenue-sharing contract led Iraq to cut off the pipeline flow of Kirkuk crude to the KRG, blocking revenues for the cash-strapped regional government in the throes of the war against ISIS.

Earlier this week, SOMO blacklisted three tankers from using Iraqi ports because they had been working with the Kurds to export oil to markets in Turkey.

On Wednesday, Baghdad said that if the two sides did not agree on a revenue-sharing deal soon, Iraq would consider trucking oil from Kirkuk to Iran instead of using a pipeline that runs through the KRG to bring crude to international markets.

Kirkuk Governor Najmuddin Karim of the Kirkuk province commented yesterday that he would not allow the Iraqi government to truck its fuel to Iran if negotiations broke down, citing environmental and infrastructural concerns.

By Zainab Calcuttawala for Oilprice.com

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