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Middle East Oil Producers Are Drowning In Debt

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Kurdish Government May Close 250,000 Bpd Oil Deal With Iraq

The Kurdistan semi-autonomous region of Iraq is ready to hand over to the federal government 250,000 barrels per day (bpd) of oil production and the oil revenues it generates, Middle East Monitor reports, citing a spokesman for the Kurdistan Regional Government (KRG).

Last month, the federal government of Iraq stopped paying salaries to KRG public sector employees because of the dispute over oil revenues. At the end of 2019, Kurdistan and the federal government of Iraq had agreed that KRG would transfer oil revenues and 250,000 bpd to the federal government.

But the federal government has said that Kurdistan has failed to send oil or cash Baghdad’s way.

The federal government of Iraq pays nearly half of the sum necessary to cover KRG administration employees.

Kurdistan, for its part, was severely hit by the oil demand and oil price collapse in March and April and is struggling with payments.

“The Kurdistan Region is going through difficult economic times due to falling oil prices and the impact of the coronavirus pandemic, and must make adjustments due to limited financial resources,” Prime Minister Masrour Barzani said at a KRG cabinet meeting this week.

After weeks of negotiations and a meeting between KRG representatives and officials from Iraq’s federal government on Wednesday, the spokesman for Kurdistan’s Regional Government, Jutiar Adel, said, as carried by Middle East Monitor:

“Within the framework of the agreement concluded in 2019, we are willing to deliver 250,000 barrels of oil per day to the federal government. We are also committed to transferring the financial revenues generated from oil sales to the Iraqi state treasury.”

Meanwhile, Kurdistan said last month that it would defer payments to oil companies operating in the region for the oil sales they had made between November 2019 and February 2020, as Iraq and the Kurdistan region are struggling to meet their obligations after the oil price crash.  

By Tsvetana Paraskova for Oilprice.com

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  • Rami Sadiq on May 16 2020 said:
    What many people don't realize how much Kurdistan is suffering from the Barzani Family. Central govement of Iraq send money to the people of Kurdistan majority of the time the money does not get handed out to the working class. People continue overlook the KRG's corruption and abuse. Barzani and Talabane family take most of the money and take it out of the country and deposit them in different banks under different names.

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