Bulletin de liaison et d'information - Institut kurde de Paris
Bulletin de liaison et d'information - Institut kurde de Paris
Bulletin de liaison et d'information - Institut kurde de Paris
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26<br />
Revue <strong>de</strong> Presse-Press Review-Berhevoka Çapê-Rivista Stampa-Dentro <strong>de</strong> la Prensa-Basin Öz<strong>et</strong>i<br />
Maliki Puts Kurds<br />
on Spot Over<br />
Oil Payments<br />
www.al-monitor.com<br />
By: Ab<strong>de</strong>l Hamid Zebari for Al-Monitor<br />
T<br />
March 11, 2013<br />
hrough the ratification of the Iraqi Public Budg<strong>et</strong> Law for the year<br />
2013 in parliament based on the principle of "majority" rather than<br />
"consensus" — amid a Kurdish boycott of the parliamentary session<br />
— it seems that Prime Minister Nouri al-Maliki has put difficult<br />
choices before the Iraqi Kurds, which may manifest in the coming days.<br />
The Iraqi parliament approved on Thursday [March 7] the country’s<br />
general budg<strong>et</strong> of $119 billion. The session was boycotted by Kurdish<br />
<strong>de</strong>puties, and had been <strong>de</strong>layed for weeks due to several disagreements,<br />
most notably over the payments of foreign oil companies operating<br />
in the Kurdistan region.<br />
The Kurdistan Regional Government (KRG) has asked the Iraqi government<br />
to pay the remaining dues of foreign companies, estimated at<br />
about $4.5 billion, while the fe<strong>de</strong>ral government has only agreed to pay<br />
$750 million.<br />
The dispute erupted in September 2012, after the Iraqi government paid<br />
around 650 billion Iraqi dinars [$558 million] out of 1 trillion [$858 million]<br />
owed, on condition that the Kurdistan region would produce<br />
250,000 barrels of oil daily. Payment of the remaining dues was<br />
<strong>de</strong>layed, with the Iraqi government providing various excuses, prompting<br />
the Kurdistan region to stop the export of oil from the region’s wells<br />
through the Turkish Ceyhan line.<br />
As soon as the fe<strong>de</strong>ral budg<strong>et</strong> law for this year was approved, the KRG<br />
announced its rejection of many sections of the law. It noted that the<br />
political parties that approved the law based on the principle of majority<br />
have overlooked the proposals and observations ma<strong>de</strong> by the Kurdistan<br />
region on the budg<strong>et</strong> law, violated the rights of the people of Kurdistan<br />
and aborted the principle of national consensus and genuine partnership<br />
in power.<br />
The KRG pledged to take all possible legal and constitutional action<br />
against this attempt, which aims to harm the interests and lives of the<br />
citizens of Iraqi Kurdistan.<br />
The presi<strong>de</strong>ncy of the Kurdistan region <strong>de</strong>scribed the manner with<br />
which the budg<strong>et</strong> law was passed as marginalization of a key component,<br />
a supposed founding partner of the political process and rebuilding<br />
the state, and a major <strong>et</strong>hnic group in <strong>de</strong>termining the future of the<br />
country.<br />
The position of the presi<strong>de</strong>ncy of Kurdistan came after Presi<strong>de</strong>nt of the<br />
Kurdistan Region Massoud Barzani called for an urgent me<strong>et</strong>ing of all<br />
members of the Kurdish bloc in the government and parliament in Erbil<br />
to discuss the issue.<br />
A presi<strong>de</strong>ntial statement <strong>de</strong>clared that "in a remarkable step that reinforces<br />
division in the Iraqi national ranks and monopoly of political<br />
power and the country's lea<strong>de</strong>rship, the fe<strong>de</strong>ral budg<strong>et</strong> was passed by<br />
the State of Law coalition led by Maliki without taking into consi<strong>de</strong>ration<br />
a major nationalist point of view.”<br />
The Kurdistan presi<strong>de</strong>ntial statement adds: “As we are forced to take<br />
this position, which is open to all options, we hold the State of Law coalition,<br />
Maliki, and their collaborators responsible for what might ensue,<br />
and possible positions and <strong>de</strong>velopments.”<br />
Maliki has put the Kurds in a difficult position in the face of foreign companies<br />
operating in the Kurdistan region, which are <strong>de</strong>manding their<br />
dues after having waited for a long time, especially since they had been<br />
promised by the KG that it would resolve its legal differences with<br />
Baghdad.<br />
Iraqi Prime Minister Nuri al-Maliki (L) speaks next to Iraq's<br />
Deputy Prime Minister for Energy Hussain al-Shahristani during a<br />
me<strong>et</strong>ing of the Council of Ministers in Kirkuk, May 8, 2012.<br />
The KRG has so far signed 50 contracts with foreign companies, which<br />
have invested $15 billion to $20 billion in oil exploration and production<br />
in the region. However, these companies cannot export oil without the<br />
consent of Baghdad or use it in any way because the company in<br />
charge of oil export is the Iraqi Oil Mark<strong>et</strong>ing Organization(SOMO), and<br />
r<strong>et</strong>urns go to the Iraqi fund.<br />
The proportion of the general budg<strong>et</strong> allocated to the Kurdistan region<br />
is over 15 trillion Iraqi dinars [$12.9 billion] for 2013, according to the<br />
17% quota s<strong>et</strong> for it within the Iraqi public budg<strong>et</strong>. Should the KRG pay<br />
the due payments to foreign companies, it would lose half the budg<strong>et</strong>.<br />
This would also put the Kurdistan region in an unnecessary financial<br />
quandary as it seeks more <strong>de</strong>velopment and reconstruction.<br />
Oil analyst and expert Wajid Shaker says that the fe<strong>de</strong>ral government’s<br />
procrastination in paying the dues of foreign companies will force the<br />
Kurdistan region to pay the amount from the r<strong>et</strong>urns of oil being produced<br />
in oil wells in Kurdistan.<br />
He told Al-Monitor: “I suppose that the Kurdistan region will take a position.<br />
The way to <strong>de</strong>al with the situation will be based on the KRG’s <strong>de</strong>cision.<br />
However, I believe that [the KRG] is able to export oil and pay the<br />
dues of foreign companies.”<br />
Last year, the KRG exported cru<strong>de</strong> oil from wells in Kurdistan via<br />
Turkey, but in small amounts and without the consent of Baghdad,<br />
saying it adopted this plan to fill the shortage in oil <strong>de</strong>rivatives after the<br />
Iraqi government stopped providing it with them, especially since the<br />
existing refineries in Kurdistan are unable to process the quantities nee<strong>de</strong>d<br />
by the local mark<strong>et</strong>.<br />
Sources indicate that the Iraqi government’s insistence on not paying<br />
the dues of foreign companies operating in the Kurdistan region is a<br />
step it took to force these companies to stop signing contracts with the<br />
Kurds, <strong>de</strong>spite the government’s constant warnings directed at these<br />
companies.<br />
Shaker said that this would not prevent companies from coming to the<br />
Kurdistan region because they are carefully examining the issue: “Big<br />
companies like ExxonMobil and Chevron have legal and technical<br />
<strong>de</strong>partments that correspond to the governmental technical <strong>de</strong>partments<br />
in Iraq. They also have fields worldwi<strong>de</strong> and enjoy a prominent<br />
status in the world of oil. They have studied the issue, know their interests<br />
and can obtain their rights.”<br />
Shaker ad<strong>de</strong>d, “It seems that the Kurdish position so far is limited to<br />
threatening to withdraw from the government hea<strong>de</strong>d by Maliki, then<br />
withdrawing from the political process in the country. In the final stage,<br />
[the Kurds] might adopt a tougher stance, the <strong>de</strong>tails of which the<br />
Kurdish lea<strong>de</strong>rs are withholding, since it is early to do that."While<br />
Kurdish political analyst Abdul-Ghani Ali Yahya said in an interview with<br />
Al-Monitor that “the ratification of the Iraqi budg<strong>et</strong> for 2013 by the Iraqi<br />
parliament, <strong>de</strong>spite a boycott by the Kurdish bloc, contradicts the principle<br />
of consensus that has dominated political life in Iraq, albeit on a<br />
small scale, and will inevitably lead to the majority government advocated<br />
by the State of Law coalition, which is opposed by the Kurds and<br />
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