Iraqi Kurds to get $243M for February-March oil sales

Dow Jones International News, May 5, 2011

By Hassan Hafidh, Amman

Iraq’s Kurdistan region will get $243 million, which represents around 50% of net revenues from exporting some 5 million barrels of oil in February and March, ending a dispute with the federal government in Baghdad that has continued for years, the region’s prime minister said Thursday.

« The Kurdistan Regional Government has received a written notice from the federal ministry of finance in Baghdad, confirming release of the first oil export payment to the KRG, » Barham Salih said in a statement carried out by the official KRG website.

Meantime, the region’s Oil Minister Ashti Hawrami said that the Kurdistan region has been exporting at an average level of 135,000 barrels a day between March 27-April 29, compared with an average of 100,000 barrels a day in February and March.

Hawrami said that all the money received from Baghdad will be paid to contracting companies that are developing the region’s oil fields, among them Norway’s DNO International SA (DNO.OS), which is pumping oil from Tawke oil field, and China’s Sinopec (SHI) and Turkey’s Genel Enerji, which are jointly producing oil from Taq Taq field.

Hawrami welcomed the Baghdad government’s move to release the payments, saying it would incite them to « increase oil export to 200,000 barrels a day by the end of this year. »

The Iraqi central government late last year reached an agreement with Kurdish authorities to resume oil exports from the semi-autonomous region as from February, and agreed to pay exploration costs and expenses to foreign firms in the KRG.

The Kurds suspended exports of 40,000-60,000 barrels a day in September 2009, from the Tawke and Taq Taq fields, after a brief trial because the federal government refused to compensate oil companies for costs incurred during exploration and production.

The federal government, which grants all oil-export licenses, has been at odds with the Kurds since 2007 over several oil and gas contracts the Kurds signed with foreign companies. Baghdad argues it has neither seen them or been consulted on these deals.

Salih said the new move could help pave the way for solving all pending issues between the KRG and the central government in front of which enacting a federal hydrocarbon and oil-revenue sharing laws. The long-awaited draft laws have been stalled by debates at the country’s parliament for years.