Kurdistan Region still to iron out new oil deal with Baghdad: Reuters

No crude delivered yet
FILE PHOTO: Kurdistan Region President Nechirvan Barzani sits in a shaft of window light as he greets U.S. Vice President Mike Pence in the VIP terminal at Erbil International Airport in Erbil, Iraq November 23, 2019. REUTERS/Jonathan Ernst

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SULAIMANI — The Kurdistan Region has yet to begin implementing a new oil deal with the federal government as final details have yet to be agreed with Baghdad, its president Nechirvan Barzani told Reuters.

“The deal was signed but a lot of details have yet to be agreed. They have a caretaker government at the moment,” Barzani said, referring to the cabinet in Baghdad.

Last year, Erbil and Baghdad agreed an early deal that most of the oil produced in the Region would be transferred to national state company SOMO in exchange for budget funds beginning this month.

But the exact budget allocation has yet to be agreed and the two sides also need to decide how to service Kurdistan’s debt in which oil was used as collateral. At the moment, Kurdistan Regional Government’s exports stand at around 400,000-500,000 barrels per day (bpd).

Several informed sources have told NRT Digital Media on background that no oil has been delivered yet, pending the passage of a new federal budget.

Under last year’s budget, the Region was supposed to send 250,000 bpd to SOMO, but never did. In retaliation Baghdad cut the amount of money it sent to Erbil, only transferring enough to pay public sector salaries.

(NRT Digital Media/Reuters)