AFP, Baghdad :
Iraq’s federal authorities and the cash-strapped Kurdish regional government (KRG) have relaunched talks over longstanding oil and budget disputes, but observers are sceptical they will reach a genuine diplomatic reset.
Here are a few questions and answers to clarify the complex issue.
Ties between Baghdad and Arbil have long been strained, amid federal fears the energy-rich Kurdish autonomous region would seek independence.
They plunged sharply in 2014 when the KRG began exporting oil directly to Turkey, taking advantage of the chaos sparked by the Islamic State group’s onslaught.
Under a deal mediated by then-oil minister Adel Abdel Mahdi, the KRG agreed to export oil through Iraq’s State Oil Marketing Company (SOMO) in exchange for resuming the receipt of its share of the federal budget.
But it has never been fully implemented, with Arbil demanding larger budget allocations and both sides trading accusations over unfulfilled terms.
The relationship soured even further when Kurds voted overwhelmingly in favour of secession in 2017.
Iraq’s 2019 budget stipulates the KRG must export 250,000 barrels per day of oil through SOMO and hand other crude revenues to Baghdad in exchange for around 12 percent of the budget, or $8.2 billion.
In a first, the budget stipulates Baghdad will pay KRG’s salaries regardless of whether other terms are honoured.
Baghdad has been paying those salaries but not the rest of the allocation because the KRG has continued directly exporting up to 500,000 bpd to Turkey.
In July, the KRG’s new prime minister Masrour Barzani met Adel Abdel Mahdi, now premier of Iraq, to form technical committees to tackle the disputes.
“Barzani was almost in a rush, which is a good sign,” said an Iraqi official with knowledge of the file.
Iraq’s federal authorities and the cash-strapped Kurdish regional government (KRG) have relaunched talks over longstanding oil and budget disputes, but observers are sceptical they will reach a genuine diplomatic reset.
Here are a few questions and answers to clarify the complex issue.
Ties between Baghdad and Arbil have long been strained, amid federal fears the energy-rich Kurdish autonomous region would seek independence.
They plunged sharply in 2014 when the KRG began exporting oil directly to Turkey, taking advantage of the chaos sparked by the Islamic State group’s onslaught.
Under a deal mediated by then-oil minister Adel Abdel Mahdi, the KRG agreed to export oil through Iraq’s State Oil Marketing Company (SOMO) in exchange for resuming the receipt of its share of the federal budget.
But it has never been fully implemented, with Arbil demanding larger budget allocations and both sides trading accusations over unfulfilled terms.
The relationship soured even further when Kurds voted overwhelmingly in favour of secession in 2017.
Iraq’s 2019 budget stipulates the KRG must export 250,000 barrels per day of oil through SOMO and hand other crude revenues to Baghdad in exchange for around 12 percent of the budget, or $8.2 billion.
In a first, the budget stipulates Baghdad will pay KRG’s salaries regardless of whether other terms are honoured.
Baghdad has been paying those salaries but not the rest of the allocation because the KRG has continued directly exporting up to 500,000 bpd to Turkey.
In July, the KRG’s new prime minister Masrour Barzani met Adel Abdel Mahdi, now premier of Iraq, to form technical committees to tackle the disputes.
“Barzani was almost in a rush, which is a good sign,” said an Iraqi official with knowledge of the file.
