PM Barzani receives Norwegian Defense and Foreign Ministers

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) – Kurdistan Region Prime Minister, Nechirvan Barzani, yesterday received the Norwegian Defense Minister, Ine Marie Eriksen Søreide, and Foreign Minister Børge Brende, and their accompanying delegation.

The meeting was also attended by the Kurdistan Region Deputy Prime Minister, Qubad Talabani, Minister of Peshmerga Affairs, Mustafa Sayed Qadir and other Kurdistan Regional Government, KRG, senior officials.

Norwegian Foreign Minister praised the people and government of the Kurdistan Region for having accommodated and assisted a large number of internally displaced people, IDPs, and refuges, who fled violent repressions of the Islamic State terrorist organization, ISIS, and took refuge in the Kurdistan Region.

Mr. Brende also praised the role of the Peshmerga forces in protecting the Region against ISIS.

Norwegian Defense Minister reiterated her country’s support to the Peshmerga forces particularly in the fields of military training, expressing her satisfaction for the progress that has been made in the training plan of the Peshmerga forces.

Prime Minister Barzani expressed the gratitude of the Kurdistan people and government to the Norwegian government for its assistance to the Kurdistan Region at this difficult time.

Prime Minster Barzani urged the Norwegian government and international community to increase their humanitarian assistance to Kurdistan Region in order to be able to face the humanitarian crisis which it currently experiences as the result of the fight against terrorism.

He also asked for the continuation of Norwegian support for the Peshmerga forces.
The two sides also discussed the recent developments in the region and the relations between the Kurdistan Regional Government and Iraqi Federal Government.


Statement by Ministry of Natural Resources: Setting the record straight on oil export and revenue so that the people of Kurdistan can judge for themselves

Erbil, Kurdistan Region, Iraq (mnr.krg.org) – Despite significant political and economic challenges, and acts of theft and sabotage on the export pipeline inside Turkey, the Ministry of Natural Resources (MNR) has boosted crude oil export and generated sufficient funds to meet the KRG’s planned revenue goals.

The KRG policy to increase direct oil sales (jointly agreed in June by the KRG and all five political parties in the coalition government) will enable the KRG to cover ongoing government costs and state salaries and to start to pay off the backlogs of unpaid wages. In addition, the KRG will be able to begin payments to the exporting oil companies so that they can sustain and then increase their oil export levels, which is vital for the Region’s economic welfare.

In 2014, former Prime Minister Nouri Al- Maliki’s government cut the entire Kurdistan budget, creating a financial crisis for the people of the Kurdistan Region.

At that time, despite the limited capacity to export oil, the Ministry of Natural Resources (MNR), under the directive of the Kurdistan Region Oil and Gas Council, moved quickly to organize alternative financial support for the Kurdistan Region by a) increasing pipeline export capacity, b) boosting actual oil exports, and c) successfully securing from buyers pre-payments against future oil supplies.

As a direct result of those measures, the Kurdistan Regional Government (KRG) was able to survive financially during 2014, although payments of some government salaries were partially lagging behind. However, other unexpected factors came into play that severely impacted the financial situation, such as the added costs of the war against IS terrorists and the economic burden on the Region from hosting 1.8 million refugees and internally displaced people.

Then at the end of 2014, following new budgetary discussions, the KRG and the entire political leadership in Kurdistan, including the five political parties in the coalition government, decided to give the new government in Baghdad a chance, under its new Prime

Minister Haider Al-Abadi.
The cooperation and coordination reached with Baghdad was encouraged by all the Kurdistan political leaders. It consisted of a plan to supply certain volumes of oil from the Kurdistan Region to SOMO in return for the KRG’s full federal budget entitlement during 2015, which was estimated at around US$1 billion per month. This became an undertaking towards the KRG in the federal budget law of 2015.

Although MNR was pleased with the agreement with Baghdad, based on its experience of all the previous failed agreements, MNR internally registered its doubts as to whether Baghdad could or would fulfill its financial obligations to Kurdistan under the agreed oil-for-budget plan. Nevertheless, MNR fully encouraged the KRG’s decision to proceed and actively did all that was possible to make the plan work for both sides.

Regrettably, as predicted by MNR, the KRG received only one third of its budget entitlement from Baghdad in the first five months of 2015. This led to a rapid deterioration of the financial crisis in the Kurdistan Region and caused a significant backlog in the pay of government salaries, including those of the Peshmerga and the security forces.

Predicting that the crisis would deepen month by month, in spring 2015 MNR organized a series of meetings with the Regional Oil and Gas Council, the Council of Ministers, the political leadership of the five parties in Kurdistan, MPs in the Kurdistan parliament and the Kurdistan MPs from the federal parliament in Baghdad, to explain and forewarn of what would lie ahead.
The Minister of Natural Resources explained the economic realities of the situation facing the Region, and urged support for reforms to cut government costs.

The Minister of Finance, supported by the Council of Ministers, took a lead on this and produced a credible reform plan to cut government costs and increase the non-oil revenues of the Region.

Unfortunately, the Minister of Finance did not receive the required political support (particularly from some key decision makers in his own party) to implement that reform program. Thus, the budget shortfall from Baghdad, coupled with ever increasing KRG expenditure, led to more delays in government salaries and support for the Peshmerga and other vital security services.

By late spring this year, the inability or unwillingness of Baghdad to provide the KRG’s fair share of the agreed budget had become clear to the KRG and the entire political leadership of Kurdistan Region. But despite the overwhelming evidence, no action was taken by the political leadership to deal with this new deteriorating reality.

Only in mid June did the political parties of Kurdistan reluctantly agreed to MNR’s long-suggested proposal to increase direct sales of KRG oil to international exporters, in order to provide a direct and predictable economic lifeline to our Region.

That political decision took effect on 24 June 2015.  The program involved the following:

• MNR to boost crude oil export to 500,000 barrels per day from KRG operated fields, assuming no interruptions to the flows in the pipeline beyond MNR’s control, and no political interference or reneging on the decisions taken.

• It was assumed and hoped that an average netback price of $55 per barrel would remain in place for the rest of the year.

• This was then expected to generate around $850 million per month, which was deemed to be sufficient to pay ongoing government costs and salaries and begin covering the backlog in the salaries.

• MNR was assigned responsibility for finding buyers for KRG crude oil and for agreeing with the previous buyers of the KRG’s oil (who had made pre-payments in 2014) to defer their outstanding pre-payments until 2016 to enable the KRG to receive the full $850 million per month during 2015.

• It was assumed that this $850 million per month would allow the KRG to set aside some funds to pay the exporting international oil companies, so that they would maintain and then increase export levels, and thereby increase revenues even further.

• It was also agreed that the Ministry of Finance would be in charge of receiving all oil revenues at the Kurdistan International Bank (KIB) and HalkBank.

• In early July, a further government directive, signed by the KRG Prime Minister, authorized the Minister of Finance with controlling the movement of money from the KRG’s account in HalkBank in Turkey.

• It was also agreed that all other revenue, if not directed to HalkBank for any practical reason, should be directed to the Ministry of Finance account at the KIB.

As a result MNR duly performed the following:

• MNR immediately signed contracts with experienced international oil traders and buyers for its available export volumes, a process approved by the Regional Oil & Gas Council around the third week of June 2015.

• MNR obliged the buyers to guarantee $850 million monthly, assuming that the average export levels were achieved.

• MNR persuaded all the traders involved to agree to defer receiving oil against their outstanding pre-payments until 2016.

• However, in practice, MNR faced significant interruptions to oil flow through the pipeline in Turkey due to sabotage and theft, leading to reduced export levels and the loss of revenue to the KRG of $501 million (details of which were published recently). Unfortunately, some domestic politicians appeared slow to condemn the sabotage to discourage similar acts in the future.

• Failure to meet contractual export delivery targets at the agreed average levels released the buyers from their full payment obligations of $850 million per month. However, even then the traders were once again persuaded not to cut back on the payments on those occasions.

Adding to all these challenges, the price of crude oil has dropped since mid June 2015 by approximately 20%.

Despite all of those difficulties, the following payments have been made or are expected to be received in the two months, from 24 June to 24 August 2015:

a)   As of 20 August, the KRG received $1,241.6 million ($1.24 billion) into the KIB account in favour of the Ministry of Finance. The Ministry of Finance is tasked with following up with KIB on the management and movement of the funds received.

b)  A further deposit of $187.5 million will be made into the same KIB account today, 21 August.

c)  A further $125 million is also expected on or before 24 August.

d)  Thus a total of $1,554.1 million ($1.55 billion) has been achieved for the past two months. This is more than promised under the agreements with the traders, despite the reduced oil exports caused by interruptions and factoring in the cost of the purchased products mentioned below.

e)  In addition, the KRG purchased refined products amounting to $134 million, using export oil swaps for diesel for the KRG’s power stations.

MNR is therefore well ahead of the payments received schedule compared to the agreed program, despite the difficulties and the flow interruptions.

The money flow management and transfers through KIB and HalkBank are solely assigned to the Ministry of Finance. But the Ministry of Finance has been unable to bring all the oil revenues into Kurdistan for these reasons:

• The Minister of Finance has not been able to take the necessary procedural and administrative steps to take financial responsibility for the Ministry of Finance with the HalkBank, in order to improve the flow of the funds into Kurdistan. It is understood that this is because of direct political interference by some people in his own party, in order that they can shift the blame to MNR for the delayed payments to the Peshmerga forces and government employees.

• Also, there are some recognized difficulties in bringing dollars into Kurdistan via the KIB in a timely manner and converting them into Iraqi dinars to pay salaries. The Ministry of Finance is working on a solution to these difficulties, and MNR has always been ready to assist if needed.
In Summary

• MNR has stuck to the task at hand and continues to deliver for the people of Kurdistan.

• MNR operates on a professional and technical basis throughout all its organisations. Contrary to the myths circulated by certain politicians and their media outlets, MNR does not allow party politics to interfere with its work.

• MNR defends the interests of the people of Kurdistan against political interference and is taking the lead in helping to secure the economic stability of Kurdistan and its future.

• MNR also believes that the Minister of Finance is doing an excellent job at his ministry, but to be more effective and more successful, he should not be hindered by political influence that damages the interests of the people.

• The Minister of Finance should be supported and authorised as soon as possible in his program of economic reform and MNR is ready to assist in this process.

• MNR is confident that providing there are no major interruptions, whether through sabotage, theft, or indeed political interference or deviating from agreed export policies, the immediate needs of the people of the Kurdistan Region can be met through continued direct oil sales.

• The KRG should always remain open to dialogue and discussion with our colleagues in Baghdad on ways to resolve all outstanding issues on oil and gas and develop long-term cooperation that leads to a win-win situation for all concerned.

• If some politicians had supported more rapid action by the KRG following Bagdad’s non-compliance on the budget payments, we would been able to minimize the impact of the financial crisis on our Region. However, at this very challenging time, MNR encourages all of Kurdistan’s political parties to put aside their narrow and often damaging self-serving agendas, and to stop using oil as a political football which undermines our ability to maintain the trust of the buyers and the willingness of the oil company investors in our Region.

• We also hope that the political parties rally round MNR in support of its work in the face of the crisis, and that they act in the interests of the people of Kurdistan whom they aspire to serve.


PM Barzani: Religious tolerance and coexistence will continue in Kurdistan Region

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) – In a speech at a ceremony held to bury 67 bodies of Yazidi martyrs in the Yezidi holy site of Sheikh Sharafaddin shrine, Kurdistan Region Prime Minister, Nechirvan Barzani, highlighted the suffering of the Yazidis, who, he said, have been oppressed twice for being Kurds and Yazidis at the same time.

Prime Minister Barzani stressed that with sacrifices given by Yazidis and Peshmerga forces, the Kurdistan people will eventually prevail and Sinjar and other Kurdish areas will be liberated from the Islamic State terrorist organisation, ISIS.

He pointed out that, “Sinjar and its environs will be liberated at any price and returned to Kurdistan Region, where security, reconstruction, and coexistence will prevail again in this historical town which has been, since the ancient time, the cradle of religious coexistence.”

“The crimes, perpetrated against Yazidi Kurds are deep pains that we will never forget, but as we have gone through many periods of violent oppression and massacres in the past, this time again we will survive and prevail with dignity,” he added.

He reiterated that the Kurdistan Regional Government, KRG, continues its efforts to liberate the Yezidi Kurds, who are still held captive by ISIS terrorists. He pointed out that “the government has opened a special office dedicated to this task, which has so far managed to liberate 2058 Yezidi sisters and brothers from the grip of terrorists.” In this regard, he expressed his gratitude to the staff working at this office, who, he said, have achieved a great and honourable task.

Prime Minister Barzani said KRG institutions work to assist the Yazidi victims and displaced, who now live in camps, with the hope that they would be able to return to their hometowns, after their areas are being liberated.

He said that the KRG continues its campaign to obtain international recognition of the crimes committed against the Yezidi Kurds as genocide, through a committee, chaired by the KRG Minister of Martyrs and Anfal affairs.

He expressed his gratitude to the Peshmerga forces that have been able to protect Kurdistan territories, and those who have been able to defend and protect Sheikh Sharafaddin shrine against ISIS threats.

Prime Minister Barzani pointed out that religious tolerance and coexistence among different communities in Kurdistan Region is a great support for the success of the Kurdistan people.

He said that the presence of representatives of various religious communities in this ceremony is a message to the enemies that coexistence will continue in the Kurdistan Region.


July report – KRG continues direct oil sales to overcome budget shortfall

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) – Oil exports from the Kurdistan Region dropped during July due to sabotage of the pipeline through Turkey.

According to the monthly Kurdistan Regional Government, KRG, oil export report for July, 16,019,090 barrels of crude oil (average 516,745 bpd) were exported through the pipeline through Turkey.  This is a 6.5 per cent decline over June when the KRG exported 17,130,639 barrels (average 571,021 bpd).

In an earlier statement, the KRG Ministry of Natural Resources said that since 27 July “there have been sabotage attacks and attempted thefts on the pipelines that carry crude oil from the Kurdistan Region to Ceyhan in Turkey”. According to the monthly export report, stoppage occurred “in the flow of crude oil to Ceyhan for 111 hours”.

Of the total amount of oil exported in July, fields operated by the KRG supplied 12,020,683 barrels (average 387,764 bpd) while fields operated by the North Oil Company (NOC) supplied 3,998,407 barrels (average 128,981 bpd).

Iraq’s State Oil Marketing Company, SOMO, in Ceyhan received 2,201,540 barrels (average 71,017 bpd). The KRG intended to deliver to SOMO a further two million barrels at the end of July, but was unable to do so due to the pipeline interruption.

According to the report, the KRG continued its direct oil sales in Ceyhan in July in order to compensate the Region for the budget shortfalls from the federal government and to pay debts incurred during 2014.

The KRG has, however, announced it will continue to work with its counterparts in the federal government to reach a resolution on all outstanding oil and gas issues per the joint statement of June 17, 2015 by the KRG’s Regional Council for Oil and Gas Affairs and the five political parties in the Kurdistan Regional Government.

Earlier this week, the KRG Ministry of Natural Resources announced that from September 2015 onwards, the KRG will on a monthly basis allocate a portion of the revenue from its direct crude oil sales to the producing international oil companies, IOCs.  Further, with exports anticipated to increase in early 2016, the KRG envisages making additional revenue available. This is important for IOCs to maintain and increase production levels.


KRG Department of Information Technology launches .KRD into Sunrise phase

Erbil, Kurdistan Region, Iraq (DIT.GOV.KRD) – Kurdistan Regional Government Department of Information Technology announces the launch of Sunrise period for Kurdistan’s top level domain (TLD) .KRD

The Sunrise Period for .KRD starts on August 5 and will end on October 4. The Sunrise launch of .KRD has been a highly anticipated milestone for KRG Department of Information Technology, DIT, that has spent considerable time preparing for the acquisition and launch of this essential top level domain.

By operating its own TLD, Kurdistan Region achieves multiple objectives such as visibility, innovation, digital economy and offers the worldwide Kurdish community a new online homeland.

“We at DIT are fully aware of our responsibilities and committed to protect the internet’s security and stability whilst operating our registry system at the world roots of the internet” said Hiwa Afandi, Head of DIT.

December 2013, after passing and complying with numerous tests and procedures, KRG DIT signed the .KRD registry agreement with ICANN granting it the rights to manage the .KRD TLD within the internationally recognised ICANN framework.

July 2014 .KRD was added to the root zone of the internet and officially delegated, becoming a technical and operational reality on the internet.

The Sunrise Period of domain registration is a special period during which trademark holders (registered in Trademark Clearinghouse, TMCH) may preregister names that are the same or similar to their trademarks in order to avoid cybersquatting. This occurs prior to the general launch of the top-level domain (TLD).

Internet users worldwide will soon see web addresses ending with .krd – the first name space on Internet for Kurdistan affiliated individuals (.krd), businesses (.co.krd), government entities (.gov.krd) and educational institutions (.edu.krd).

For further information about Kurdistan’s top level domain please visit www.dot.krd.


Statement by Ministry of Natural Resources regarding the producing International Oil Companies (IOCs) in the Kurdistan Region


From September 2015 onwards, the Kurdistan Regional Government (KRG) will on a monthly basis allocate a portion of the revenue from its direct crude oil sales to the producing international oil companies (IOCs), and as export rises in early 2016, the KRG envisages making additional revenue available to IOCs.

At the start of 2015, the KRG reached a deal with the federal government in Baghdad to export crude oil in exchange for regular payments of the Region’s 17% revenue entitlement. The arrangement was enshrined in the 2015 federal Iraqi budget.

The KRG recognizes the spirit of cooperation in which the budget deal was struck with the federal government and it remains determined to build on such progress, and through dialogue and discussion to reach a lasting agreement with Baghdad on all outstanding issues relating to oil and gas and revenue sharing.

The KRG has also been pleased with the level of technical cooperation on the ground from federal government entities such as the North Oil Company (NOC) and SOMO. The KRG will continue to facilitate oil export from NOC-operated fields in Kirkuk via the KRG’s pipeline network to Turkey.

However, due to a number of factors, the federal government has to date been unable to provide the Kurdistan Region with its monthly budgetary dues. As a result, the KRG has been obliged to introduce direct crude oil sales from Ceyhan to help pay Kurdistan Region’s governmental salaries, maintain vital government services, and of course, pay the Peshmerga and other security forces who are fighting Islamic State terrorists.

Although the revenue gained from direct sales is still below Kurdistan’s 17% share of the federal budget, it is significantly higher than the amount the federal government was able to allocate to the KRG on a monthly basis.

In this regard, the KRG acknowledges and appreciates the economic contribution to the Kurdistan Region made by the producing IOCs and their success in raising oil export from Kurdistan to record levels. They have demonstrated their commitment to the people of Kurdistan at a time when the Region has been fighting terrorism, enduring a budget shortfall from the federal government in Baghdad, and shouldering the social, political and economic burden of an influx of 1.8 million refugees and internally displaced people.

The KRG also recognizes the patience of the producing IOCs, which, despite receiving hardly any payments for their crude oil production since May 2014, have maintained operations and have continued to invest to support Kurdistan’s crude oil export.

Crude oil export is the principal revenue earner for the Kurdistan Region. But, it is also recognized that it is difficult for the IOCs to sustain oil export at its current levels, let alone increase it as planned, without receiving their financial dues.

Therefore, from September 2015 onwards, the KRG will on a monthly basis allocate a portion of the revenue from its direct crude oil sales to the producing IOCs, to cover their ongoing expenses. Furthermore, as export rises in early 2016, the KRG envisages making additional revenue available to IOCs to enable them to begin to catch up on the past receivables due under their production sharing contracts.


The United Kingdom supports settlement of differences between Erbil and Baghdad

Erbil, Kurdistan Region, Iraq (cabinet.gov.krg) – Kurdistan Region Prime Minister, Nechirvan Barzani, yesterday received Ambassador Frank Baker, United Kingdom ambassador to Iraq and his accompanying delegation.

Ambassador Baker highlighted bilateral relations between Kurdistan Region and United Kingdom in all the fields, particularly the commercial and economic areas.

The two sides discussed the situation in Iraq in general and the fight against the Islamic State terrorist organisation, ISIS, in particular.
Ambassador Baker reiterated UK support for the Peshmerga Forces in the war against terrorism, praising their role and that of the people and government of Kurdistan Region in confronting and repulsing the terrorist threat.

He also pointed to the differences between Kurdistan Region and Iraqi Federal Government, as well as the Region’s internal issues, particularly the Kurdistan Region Presidency Law, stressing the need for solving those issues through dialog, common understanding, and consensus.

Ambassador Baker expressed his support and collaboration for the settlement of these issues.

Prime Minister Barzani thanked the UK delegation for the visit, expressing his hope that bilateral relations between Kurdistan Region and United Kingdom will witness further development in all the fields.

He highlighted the continuous victories marked by the Peshmerga Forces in the war against ISIS. Meantime, he called for further military aid for Peshmerga forces from European countries, particularly the United Kingdom.

Regarding the differences with the Iraqi Federal Government, Prime Minister Barzani reiterated that Kurdistan Regional Government aims to solve the issues through dialog and negotiations.

Regarding the issue of the Kurdistan Region Presidency Law, he reiterated that it should be settled on the basis of consensus and mutual understanding, and that all the political sides should reach an outcome that is in the general interests of the Kurdistan Region.