• 5 minutes Oil prices forecast
  • 8 minutes Nuclear Power Can Be Green – But At A Price
  • 11 minutes Projection Of Experts: Oil Prices Expected To Stay Anchored Around $65-70 Through 2023
  • 16 minutes Europe Slipping into Recession?
  • 11 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 6 hours Socialists want to exorcise the O&G demon by 2030
  • 3 hours Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 4 hours UK, Stay in EU, Says Tusk
  • 1 day Germany: Russia Can Save INF If It Stops Violating The Treaty
  • 2 days Connection Between Climate Rules And German's No-Limit Autobahns? Strange, But It Exists
  • 2 days Conspiracy - Theory versus Reality
  • 5 hours How Is Greenland Dealing With Climate Change?
  • 2 days Chevron to Boost Spend on Quick-Return Projects
  • 1 day Maritime Act of 2020 and pending carbon tax effects
  • 2 days U.S. Treasury Secretary Mnuchin Weighs Lifting Tariffs On China
  • 2 days Regular Gas dropped to $2.21 per gallon today
Global Automakers To Spend $300 Billion On EVs In 10 Years

Global Automakers To Spend $300 Billion On EVs In 10 Years

Despite collapsing global automobile sales,…

Kurdish Government Inches Up Oil Sales To Meet Debts

The semiautonomous Kurdistan Regional Government (KRG) in northern Iraq has escalated its direct oil sales beyond what’s permitted by an agreement with Baghdad in order to cope with rising debts incurred because of what it calls budget cuts by Iraq’s central government.

In Erbil, the KRG report on its oil sales in June said it delivered an average of 571,021 barrels of oil per day, or a monthly total of 17,130,639 barrels, via pipeline to the Turkish Mediterranean seaport of Ceyhan, and that it delivered an average of 150,000 barrels per day to Iraq’s federal State Oil Marketing Co.

The 2015 Federal Budget Law that the KRG reached with Baghdad in December 2014 limits the Kurds to export no more than 250,000 barrels of oil per day through Turkey. In return, the Baghdad government would pay the KRG $500 million a month to buy an additional 150,000 barrels of Kurdish oil.

Related: EIA Data Still Diverging From Reality

Nevertheless, a KRG statement issued on July 6 said, “In 2015, the difficult economic situation facing the region has been exacerbated by the partial payments made to the KRG by the federal government.”

In its report on June production, issued July 2, the KRG’s Ministry of Natural Resources said it independently sold more oil last month because of “significant debt backlog arising from the budget cuts of 2014 imposed by the federal government, and the need to pay down debts accumulated in 2014 from pre-payments for oil sales.”

The KRG says it has significant expenses, and so far it has sought to meet them with local and international loans. Much of its budget supports both Kurdish and Iraqi forces that have been fighting the Islamic militant group that calls itself the Islamic State, also known as ISIS or ISIL, which has been extremely active in Iraq’s Kurdish north.

Related: The Story Behind Inflated World Oil Reserves

Despite its differences with Baghdad, as well as the recent spike in independent oil sales, the KRG says it is still fully committed to the budget law. “[The KRG] will continue to work with its counterparts in Baghdad to reach a resolution on all the outstanding issues of oil and gas,” the KRG report said.

Still, the KRG Regional Council for Oil and Gas met June 17 with representatives of the five political parties in the Kurdish government and agreed that under the current circumstances, the KRG would have to stray from its deal with Baghdad, at least for now.

“If the federal government does not abide by the Federal Budget Law, the KRG will be obliged to pursue other legal solutions to settle Kurdistan Region’s financial difficulties and provide the Region’s people with security and other basic necessities.”

Related: Cyber Threat Has Oil And Gas Majors On Edge

As a result, the 2015 Federal Budget Law is at risk of failure because the KRG is ignoring its responsibility to supply the contracted amount of oil to Iraq’s State Oil Marketing Co., according to a report by Verisk Maplecroft, a risk consultant group based in Bath, England.

“The prospect for a revival in the oil revenue-sharing agreement between Baghdad and Erbil will remain limited for the short term at least,” the company’s principal regional analyst, Jordan Perry, said in a statement.

By Andy Tully Of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News