The success of the coalition government in Baghdad has always demanded a Kurdish presence, which has prevented Shiite and Sunni Arab political parties from criticizing the northern region, especially for their oil sector moves.
But lately this has changed, with political leaders claiming the Kurdistan Regional Governments oil deals need to be addressed. A hearing with both the national and KRG oil ministers has been called for, though nothing has happened yet. But a delegation from the KRG was in Baghdad over the weekend to talk about oil and other issues, such as how the money is to be shared.
The national oil minister has called the 20-plus KRG deals with international oil firms “illegal,” and threatened to blacklist any companies who has signed such deals. Sources tell Iraq Oil Report that Minister Hussain al-Shahristani will also cancel or block any contracts between the State Oil Marketing Organization, SOMO, the company tasked with selling Iraqi oil, and any company who has signed with the KRG.
None of this has ever sat well with the KRG, who claim the central government is moving too slow and wants to prevent progress in the north.
Both sides claim the other is derailing the proposed national oil law.
KRG Prime Minister Nechirvan Barzani has now drawn the line, Damien McElroy reports in The Telegraph.
Kurdish leaders in northern Iraq have threatened to withdraw support from the Baghdad government if demands for federal power-sharing and a fair share of oil wealth are not met.
Nechirvan Barzani, the prime minister of Kurdish northern Iraq, said that Iraq’s Shia-led coalition government, which relies on Kurdish MPs to survive, “must be changed” if it does not transfer powers to his region.
“What we ask for as Kurds comes within the constitution of Iraq,” he said. “We did whatever we could do to ensure that Iraq could succeed, but Iraq is a complicated country. Now we have reached one question, whether we are partners in the government or not. We don’t have that kind of feeling.
“Certainly if we do not see any response from Baghdad to solve the issues raised, we would be obliged to take another route,” he said.
Meanwhile Shahristani is moving forward with oil deals on his own
As reported before, Iraq’s national oil minister will not wait on a national oil law, instead relying on the Saddam-era law (and irking the Kurds) which gives the Oil Ministry the rights to sign deals.
The Big Oil companies would prefer production sharing contracts, which give them long terms and allow them to add the oil fields they’ve been awarded to their books that Wall Street judges.
A source has confirmed to Iraq Oil Report that there are five service agreements nearing completion, where Iraq would pay companies to fix and improve an oil field.
They are:
BP for North and South Rumaila
Shell for Kirkuk
Shell/BHP for Missan
Chevron and Total for West Qurna
ExxonMobil for Zubair
The U.N. Security Council and the International Monetary Fund approve Iraq
The Security Council said it is the “last time,” but has approved a one-year mandate for U.S.-led Multi-National Forces in Iraq.
From the UNSC report:
WARREN SACH, Assistant Secretary-General, Controller and the Secretary-General’s
designated representative on the International Advisory and Monitoring Board (IAMB), the audit
oversight body for the Development Fund for Iraq, said the Fund held the proceeds of petroleum
export sales from Iraq, as well as the transferred balances from the United Nations “oil-for-food”
programme and other frozen Iraqi funds.He said that from inception to 31 December 2006, the Board had been informed that about $70.4
billion had been deposited from the sale of oil and oil products and $10.2 billion from the balance of the
oil-for-food funds. A further $1.5 billion had been deposited as proceeds from frozen assets. IAMB
helped to ensure that the Development Fund for Iraq was used in a transparent manner for the benefit of
the people of Iraq and that export sales of petroleum, petroleum products and natural gas from Iraq were
made consistent with prevailing international market best practices.IAMB had early on identified major issues in contracting practices and had pointed towards the
lack of oil metering as a key element in the establishment of controls over oil revenues. The Board had
promoted the strengthening of controls in Iraq over oil export revenues and their use. It had identified
significant control weaknesses related to oil revenues, including the absence of oil metering; the use of
barter transactions; and inadequate controls over expenditures.He said some of Iraq’s oil resources had not been accounted for in the Development Fund for Iraq and had been smuggled.
Iraq last week paid off nearly $500 million in loans from the IMF, loans which came on the condition Iraq reformed its economy. Today the IMF approved another $744 million.
More on Iraq’s Oil
Syria and Iraq have agreed to reopen the oil pipeline linking Kirkuk in Iraq’s northern oil fields to Syria’s port city of Banias in the Mediterranean Sea which means the Iraqi pipeline carrying Kirkuk oil to Ceyhan will have a rival, The New Anatolian reports.
The Future of Basra
Who Will Control Basra?, Abdul Rahman Al-Rashed asks in Asharq Alawsat.
Exit her majesty; enter militias: British military command transfers security to the Iraqi army in Basra, but Shia rivalries may mean turbulence to come in this part of Iraq, Nermeen Al-Mufti reports for Al-Ahram.
Sadrist calls to restrict weapons to govt. agencies in Basra, the Voices of Iraq news agency reports.
Basra’s Sheiks reject any “awakening” council, Greg Hoadley reports for IraqSlogger.
The Turkish Invasion
May continue, The Associated Press reports.
The PKK is threatening to counterattack Turkey, AlSumaria TV reports.
