Kurdish oil export to world ‘starts in May,’ Arbil and Ankara declare

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Ankara and Arbil have announced plans to sell Kurdish oil stored in the Turkish point of Ceyhan as of the beginning of May, without waiting for  Baghdad’s consent.

Kurdistan Regional Government (KRG) Prime
Minister Nechirvan Barzani said they will start exporting oil as of May 2
– with or without the central Iraqi government’s consent, speaking in
an interview with Iraqi news outlet Rudaw.

“We have stored oil
there and on May 2 we will start selling it,” the Kurdish prime minister
was quoted as saying in the interview reported on April 28.

Turkish
Energy Minister Taner Yıldız on April 29, one day after Barzani’s
interview, confirmed the announcement, saying the Kurdish government may
start selling oil in May.

“This oil belongs to Iraq; they may
begin its export in May,” he said, answering reporters’ questions in
Norway, where he went to meet with several representatives of the energy
sector.

Baghdad has repeatedly threatened to sue Ankara and slash the Kurdish region’s share of the national budget if exports go ahead through the pipeline without its consent.

The
pipeline was completed late last year, and oil has since been pumped
through it into storage tanks at Ceyhan, but exports from the
Mediterranean port have been on hold to give diplomacy a chance since
the beginning of April.

However, both sides of the negotiation
have recently adopted a more pessimistic tone over reaching an agreement
on the issue, despite starting off hopeful.

“We went to
Baghdad for talks, but they shocked us by cutting Kurdistan’s salaries.
This would naturally cause delays in subsequent talks and how you deal
with it in the future,” Barzani said.
In his remarks yesterday, Yıldız also announced oil flow between the KRG and Turkey has restarted.
“It
[oil exports from northern Iraq] has been started for two days, with
the amount we agreed upon initially of 100,000 barrels,” he said.

The Kurds have sent around 1.5 million barrels of oil through the new pipeline, but both Ankara and Arbil have been expressing hopes to double the daily flow amount to 200,000 after setting the conditions.

Yıldız
also said buying Kurdish oil is not on Turkey’s agenda for now, but it
is up to private sector representatives to engage in private deals with
Arbil.

“Turkey’s being a customer [for Kurdish oil] is not at the
issue. [Turkey’s oil refiner] Tüpraş has its own contracts as a private
company. I always say, they can make their proposal to the private
sector and carry out their trade if they agree on a contract,” he said.

When
asked about potential oil sale to Turkey in the interview with Rudaw,
Barzani also said there will not be any price exemption for Turkey, but
if the country wants to buy oil, they can sell it.

“The oil we
export we will sell at an international price. If Turkey wants to buy
it, we will sell it to Turkey, or else we will sell it to other
countries,” he said.

Budget issue

As part of the
energy row, Baghdad has choked off funds to the northern region,
draining its reserves, as the two regions spar over a national budget
that would penalize the Kurdish government for failing to meet export
targets, as well as other issues tied to energy sector regulations.

The
central government and the Kurdish autonomous government differ over
how to interpret the constitution’s references to oil and how revenues
should be shared. The Kurdish share was set at 17 percent after the
U.S.-led invasion in 2003, although the Kurds frequently complain they
receive less than that.

When asked if the Kurdish government has
braced itself for going ahead with the exports without Baghdad’s
consent, Barzani affirmed and said they have “paid the price for it.”

He
said Baghdad has not sent Arbil’s entire share of the annual budget
since January, despite all other state institutions receiving their
portion.

“Usually, when the annual budget is approved, all
government institutions and ministries receive their share, but the only
part of the country that has received only a tiny portion of its share
is Kurdistan,” the website reported as him saying.

“Our monthly
salaries are 850 billion dinars, but we have only received 500 billion.
We received the same amount in February. In March and April we received
nothing. That is the price,” he stressed.

“I assure everyone that we can pay out the salaries without Baghdad, and we have done it so far,” he added.

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