by Mahmoud Barakat and Andrew Jay Rosenbaum
ANKARA
Kurdish Regional Government PM Nechirvan Barzani on Wednesday informed Iraqi Prime Minister Haidar al-Abadi that his government would not tolerate “the current situation,” referring to non-payment of funds due under the oil exporting agreement between Baghdad and Erbil.
The Kurdish Regional Government has stopped sending oil and oil revenue to Baghdad, citing “technical issues.”
“There are technical reasons which are hindering complete compliance with oil exports obligations,” Tarek Kurdi, a Kurdish MP said, referring to a dispute about the formulas used for quantifying how much oil is supposed to be exported to Baghdad.
But Oil Minister Ashti Hawrami on Wednesday reminded Baghdad that, from the start of 2014, an agreement was in place to send 150,000 barrels per day from the Kurdish and Kirkuk oilfields to Turkey’s Ceyhan in return for $500 million each month from the central government. Hawrami complained that Baghdad only followed through on two payments the entire year.
"Baghdad treats Erbil like an oil company, not as part of the country," Barzani told the press in a separate statement on Monday.
Barzani said his government wants to reach an agreement with Baghdad, as it will be to the benefit of the region. His government will step up efforts to make the agreement succeed.
But the Kurdish Regional Government warned that Erbil might start selling oil again on its own if Baghdad does not make payment.
Baghdad continues to insist on respect of the initial agreement.
"Our budget income depends on oil," al-Abadi said on Tuesday. "How can we pay the region's share without receiving oil?"
Iraqi government sources say the finance ministry had now sent enough cash to cover the salaries of Kurdish government employees for January, but faced a liquidity crisis and would not be able to pay in February or after that, unless the region resumed oil exports.
