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Prime Minister Barzani emphasises national unity at first cabinet meeting

Prime Minister Nechirvan Barzani chaired the eighth cabinet’s first meeting yesterday, highlighting the importance of national unity and a strong, fair, effective cabinet.

Opening comments

Prime Minister Barzani welcomed the ministers and wished them success. He said, “It is true that the government formation process took a long time. But it was successful; we were able to form a government of national unity comprised of all the winning political blocs. This was an important step and a top priority for the Kurdistan Region, and recent developments have demonstrated the importance of this achievement. Unity and harmony of the different forces in the Kurdistan Region are essential as we handle the Region’s next stages.”

The Prime Minister emphasised the importance of all political components governing together in genuine partnership and in the decision-making process. He said that the cabinet would work together in order to properly carry out the government’s duties.

Prime Minister Barzani stressed the need to better institutionalize government bodies to ensure a more effective and transparent government. He said, “I am confident in our capabilities to complete large-scale projects and tall buildings, but without a solid foundation for the government we cannot achieve success.”

Addressing challenges

In examining challenges facing the cabinet, the Prime Minister acknowledged that the previous cabinet could have operated with a better sense of teamwork. He stated that ministries and ministers should work more together closely in the eighth cabinet, also urging ministers to improve management and coordination in their own ministries, as strong management facilitates greater achievement.

Prime Minister Barzani discussed the importance of fairness in the distribution of salaries. He stated that policies designed to appease citizens over the last several years have had a negative impact on the issue of government salaries, adding that a number of laws must be amended and ministerial structures must be modernised. He also highlighted the important role of the Kurdistan Parliament to monitor this process, asking ministers to cooperate fully with the Parliament and its committees and to consider this matter diligently.

The Prime Minister also urged ministers to invest time in field visits throughout Kurdistan and to meet with local authorities in order to remain engaged and aware of obstacles and to identify legitimate needs. He explained that this practice was adopted successfully in the seventh cabinet.

Current priorities

The Prime Minister stressed the importance of reviewing legislation and administrative structures in each ministry to foster successful output and cooperation within and among ministries. He added that at present the primary priorities of the cabinet are security and the provision of electricity and services to the people of the Region.

The Minister of Peshmerga Affairs presented a detailed report regarding the current military situation in the Region and the ministry’s preparations to defend against terrorists and to protect the Kurdistan Region and the areas of Kurdistan beyond KRG administration. The Minister of Interior also discussed security developments.

Members of the cabinet exchanged views, all agreeing that the KRG policy priority is to protect the people and the land of the Kurdistan Region, including areas of Kurdistan beyond KRG administration, and for the KRG to adopt a defensive posture and not engage in military confrontation unless necessary.

The cabinet formed a committee to make logistical needs available under the direct supervision of the Ministry of Peshmerga Affairs, the Ministry of Natural Resources, the Ministry of Reconstruction and Housing, the Ministry of Municipalities and Tourism, and the Ministry of Health.

At the conclusion of the meeting, Deputy Prime Minister Qubad Talabani stated that the first meeting of the new cabinet was positive. He said, “We can succeed and we will provide the people of Kurdistan with the best services if we maintain unity in our positions and attitudes.”

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Official Inauguration of the “Kurdish Academics Association in Spain”

Yesterday the “Kurdish Academics Association in Spain” was officially inaugurated in the office of the Kurdistan Regional Government’s Representation in Spain. This is the first official Kurdish student’s body to have been established in Spain. The KRG Madrid office has given its full support to the association and has assisted with its official registration process.

The association is a fully independent body and was formed by the initiative of Kurdish students who are currently studying post graduate degrees in various Spanish universities. Kurdish students in Spain will be responsible for the running and administration of the association.

The KRG Representative to Spain, Daban Shadala, opened the event by thanking all of those who took part in the formation of the association for their hard work and initiative in creating a body that would serve the interests of the Kurdistan Region. He also pledged that “KRG Spain welcomes this initiative and will support its activities.”

The association will serve as bridge between Kurdish and Spanish academics & students and will assist those taking their first steps in making a move to either country for the purpose of furthering their academic progress. Moreover, the association will help to promote cultural and academic exchanges between the Kurdistan Region and Spain by organising an array of events.

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KRG discusses fuel shortage and takes measures to meet demand

The KRG Oil and Gas Council held a meeting last week to discuss fuel shortages. The meeting culminated with the announcement of four important steps aimed at combating fuel shortage in the Kurdistan Region.

The meeting was headed by KRG Prime Minister Nechirvan Barzani and Deputy Prime Minister Qubad Talabani.

In the meeting, also attended by the Region’s governors and the finance, natural resources, and planning ministers, the fuel shortage affecting the Kurdistan region was the main topic of discussion. The areas of Kurdistan beyond KRG administration but now protected by Peshmerga forces were also discussed.

It was noted that the Kurdistan Region and all of Iraq now face a huge rise in demand for fuel, particularly benzene. This demand for fuel outside of Kurdistan is acute because the Baiji oil refinery is currently unable to supply benzene due to the recent militant attacks. Within the Kurdistan Region, the refineries are having difficulty meeting internal demands. This is because, in addition to the cessation of the Baiji oil refinery supply, the Peshmerga forces require large amounts of fuel and benzene each day. The forces operate on the frontlines, and the borders of the Kurdistan Region are currently beyond KRG administration, requiring a great deal of transport.

Four measures were decided upon during the meeting:

1. The Kurdistan Region’s border crossing will be open for private sector supply of benzene, to be sold commercially. The sale will fall under the supervision of the Ministry of Natural Resources for two reasons: to maintain quality control and to monitor pricing.

2. The distribution of benzene produced in the Region’s refineries will be regulated in a manner consistent with demand and the capacity of the refineries to ensure the availability of benzene for automobiles. A system will be implemented in which benzene is distributed based on the license plates of vehicles, with odd number plates allowed to purchase benzene one day and even number plates the next. The Ministry of Natural Resources and the Ministry of Finance and Economy will soon issue directives to print new distribution cards that are difficult to forge.

3. Taxis, buses, and cars shuttling between cities will be dealt with uniquely. They will have their own benzene station and can increase their share of benzene on the condition that the Directorates of Commercial Control and the Ministry of Interior monitor the prices charged to passengers using this method of transportation.

4. All ministries are empowered to regulate the use of government vehicles with a view to reducing the amount of benzene consumed.

Residents who are financially capable are requested to purchase benzene from private benzene stations if possible, as this will help to alleviate the shortage until it is completely handled. This also allows residents with limited income a better opportunity to fill their vehicles at government benzene stations via the ration card system.

The Prime Minister instructed the governors of the Kurdistan Region to coordinate and work together to implement these decisions in all the governorates of Kurdistan in a fair and just manner.

Finally, the issue of jet fuel was discussed. The Minister of Natural Resources noted that the matter had been handled completely, explaining that the airports in the Kurdistan Region have no shortage in their supply of jet fuel, and the required amount of this type of gasoline is available in the Kurdistan Region. Separately, the Minister assured that there is sufficient quantity of liquid gas in the Kurdistan Region and that there are no dilemmas regarding this supply.

Following the closed meeting, KRG Spokesperson Minister Safeen Dizayee, the Governors of Erbil, Slemani, and Duhok, and the Head of the Garmian Administration held a joint press briefing. They explained the results of the meeting and next steps to be taken, also answering questions from journalists regarding the fuel shortage.

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KRG statement on oil exports

The Ministry of Natural Resources (MNR) of the Kurdistan Regional Government (KRG) is pleased to announce that the KRG’s second sale of piped crude oil export via the port of Ceyhan was safely delivered to the buyers.

This second sale of oil from the Kurdistan Region, which also consisted of around one million barrels of crude oil, was safely transported by a tanker-ship chartered by MNR.

We are proud of this milestone achievement, which was accomplished despite almost three weeks of intimidation and baseless interferences from Baghdad against the tanker-ship owners and the related international traders and buyers.

We are also proud to announce that the third and fourth tanker-ships are now in Ceyhan for loading with Kurdistan Oil for other buyers.

The KRG wishes to declare and clarify its legal authority to the benefit of all

General

1.         The KRG is acting fully within its authorities under the Constitution of the Republic of Iraq that entered into force in 2005 (“the Constitution”), and fully within Kurdistan Region law, to export and sell oil produced in the Kurdistan Region.

2.         In interfering with the exports of oil from the Kurdistan Region, the federal government is acting grossly outside its limited authorities under the Constitution. Iraq’s “Ministry of Oil” (MoO) and “State Oil Marketing Organisation” (SOMO) are not mentioned in the Constitution.

3.         The export of oil from the Kurdistan Region is taking place by the KRG, under the authority of the Oil and Gas Lawof the Kurdistan Region – Iraq (Law No. 22 – 2007) and the Kurdistan Region Financial Compensation Law No. (Law No. 5 – 2013).

4.         Article 3 Paragraph Fourth of the Kurdistan Region Oil and Gas Law requires the KRG to “oversee and regulate all Petroleum Operations”, which by definition (Article 1 Paragraph 18) includes the “export of Petroleum”.

5.         The Kurdistan Region Financial Compensation Law No. (Law No. 5 -2013) permits the KRG to retain the proceeds of sales of petroleum in circumstances where the federal government is not sharing revenues in accordance with the federal Constitution.

Iraq’s federal constitution

6.         The rights and responsibilities of the KRG and the federal government are determined by the Constitution.

7.         The constitution describes a federal, decentralised system of government for Iraq in which sovereignty is shared between the federal government of Iraq, the Kurdistan Region (which is recognised in Article 117 of the Constitution) and the various provinces or “governorates” of Iraq.  The decentralised nature of Iraq’s federal system applies to oil and gas. The federal government, as a consequence, does not have exclusive authorities in respect of oil and gas.

8.         The Constitution only grants the federal government a few, limited, exclusive powers (set out in Article 110), which does not extend to oil and gas and grants no exclusive powers over oil and gas to the federal government. The balance of all powers, including in respect of oil and gas, are either reserved to the regions (and in some cases the governorates) under Article 115 of the constitution, or shared with the regions (and in some cases, the governorates) under Articles 114 and 112 of the Constitution.

9.         There are three provisions of the Constitution that are relevant to the regulation of exports, from Iraq, of oil and gas:

(a)        Article 110, on the exclusive authorities of the federal government;

(b)       Article 112, on the management of pre-2005 old producing oil and gas fields;

(c)        Article 115, on post-2005 new field and on the relationship between the exclusive authorities of the federal government and the authorities of regions and governorates.

10.       Any powers that the federal government may have in respect of the regulation of the export of petroleum from the Kurdistan Region are:

(a)        in the case of all contract areas in the Kurdistan Region, displaced by the KRG’s reserved powers under Article 115; and

(b)       in the case of any other fields elsewhere in Iraq, shared powers which do not impair the KRG’s right to regulate the export of petroleum or petroleum products from the Kurdistan Region.

11.       Article 115 of the Constitution provides for the priority of Kurdistan Region law.Article 115 of the Constitution states that “all powers not stipulated in the exclusive powers of the federal government belong to the authorities of the regions and governorates that are not organized in a region”.  In these circumstances, the management of oil and gas extracted from fields in the Kurdistan Region is, according to the general principles of the Constitution, an exclusive power of the Kurdistan Region.

12.       This means that the Kurdistan Region has an unfettered discretion:

(a)        to authorise, regulate, and manage the export of petroleum and petroleum products from the Kurdistan Region;

(b)       to build, own, regulate, and manage petroleum and product pipelines in the Kurdistan Region, including pipelines that connect to pipelines at an international border with the Kurdistan Region; and

(c)        to enter into agreements with foreign government authorities for the regulation and connection of international pipelines, for the sale of petroleum produced by the KRG, and for the transportation of petroleum and petroleum products owned by the KRG.

13.       The federal government has no authority under the Constitution to limit the foregoing rights of the Kurdistan Region.

14.       Any pre-2005 laws of Iraq in contradiction to the constitution are specifically rendered void under Article 130 of the Constitution. To the extent that the federal government is threatening potential buyers based on old laws that contradict the Constitution, the federal government is establishing the weakness of its authority and affirming the lack of express authority under the Constitution.

15.       There are no relevant post-2005 laws of Iraq. Any proposed new law of Iraq will, pursuant to Article 13 of the Constitution, be void to the extent that it contradicts the Constitution. By contrast the KRG has organised its legal system consistent with the Constitution and enacted Law No 22 – 2007 and Law No. 5 – 2013 to invalidate the old Iraq law in the Kurdistan Region and to exercise the KRG’s rights granted under the Constitution.

Federal “policy”

16.       The exclusive federal power in respect of trade described in Article 110 First of the Constitution is limited to formulating “policy”. The federal government is granted no further authority in respect of oil and gas from the Kurdistan Region and there is no requirement for the Kurdistan Region to recognise policies of the federal government.

17.       Nothing in the Constitution, or the drafting history of the Constitution, suggests that the federal power to formulate trade “policy” determined under Article 110 First carries with it any exclusive authority to enact related legislation or any exclusive authority to issue regulations or decrees in furtherance of any expression of policy of the federal government. The word “policy” was inserted specifically and purposely throughout Article 110 as a limitation of federal power. There is no provision in the Constitution that might provide the means to invalidate a law (as distinct from a policy) of the KRG on foreign sovereign trade on the grounds that the law is inconsistent with federal policy.

KRG’s rights in relation to present (pre-2005) and future (post-2005) fields

18.       Article 112 governs the circumstances of “the management of oil and gas extracted from present fields”.

19.       The expression “present fields” is given a precise meaning under Kurdistan Region law. Article 1 of the KRG Oil and Gas Law defines a present field (or “current field” in the terminology of the English translation of that law as published by the KRG) as “a Petroleum Field that has been in Commercial Production prior to 15 August 2005”.  The meaning of “present fields” is not clear under Iraqi law outside the Kurdistan Region.

20.       There is, today, no export production in the Kurdistan Region from “present fields”. All export production is from new fields (which the 2007 KRG Oil and Gas Law calls “future fields”). Further, all exports from the Kurdistan Region are, today, from two “future fields” with respect to which contracts were signed before the constitution entered into force.

21.       Because those two contracts were signed before 2005, they are specifically ratified by Article 141 of the constitution.

22.       The federal government is not distributing revenues in accordance with the revenue sharing condition set out in Article 112. Therefore, any power of the federal government under Article 112 (in relation to even the pre-2005 present fields) would not apply. In those circumstances, any post-extraction oil and gas management of “present fields” in the Kurdistan Region must become an exclusive power of the KRG.

23.       The management of oil and gas extracted from future fields is clearly not an exclusive power of the federal government enumerated under Article 110 of the Constitution, and is not identified as a shared power under Article 112. It follows that, in respect of future fields, the general principles of the Iraqi Constitution apply and the KRG has the exclusive right to manage those fields. The KRG has this right whether or not the contracts governing those fields are the subject of the ratification provision of Article 141 of the Constitution.

  Failed federal attempts to constitutional amendments

24.       After the Constitution entered into force in 2005, there were efforts made by the federal parliament to initiate a set of amendments to Article 110 of the Constitution, including paragraph First, so that the federal government’s policy-making powers would be legislative in nature, and to include authority on oil and gas.

25.       Those efforts were documented in the 2007 record of deliberations of the parliament’s Constitution Review Committee. Those efforts did not succeed. However, those efforts do constitute clear evidence that the federal government itself understands the limitations of its powers in respect of oil and gas under the constitution as set forth above.

KRG warning

26.       To the extent third parties are intentionally assisting SOMO to prevent or discourage potential buyers of oil from the KRG, the KRG may take the view that those parties are assisting in an illegal and prosecutable conspiracy.

27.       The unconstitutional and baseless monopolistic attempts by SOMO have no place in the new Iraq and SOMO’s attempts, guided by some power grabbing individuals in Baghdad, are clearly putting the very unity of the country at risk.

28.       Once again the KRG calls upon SOMO and SOMO’s advisers and associates to stop their futile interferences with KRG’s legitimate oil sales process. The KRG strongly advises Baghdad to authorise SOMO to accept KRG’s invitation to join us in Ceyhan and work with us hand in hand to increase oil exports from all of Iraq and to maximise oil revenues to benefit of all of Iraq.

29.       The KRG’s objective has remained unchanged since the entry into force of the constitution and KRG’s 2007 Oil and Gas Law.  The KRG’s objective is to maximise revenues for all of Iraq, and for the KRG to directly receive its full 17% constitutional entitlement from Iraq’s overall oil revenue, without cuts, disruptions or controls by Baghdad.

30.       The reader may also consult the attached reference for completeness.

Attachments

Attached to this statement are the following:

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Prime Minister Barzani outlines priorities at inauguration of eighth cabinet

The eighth cabinet of the Kurdistan Regional Government was announced at a special session of the Kurdistan Parliament held on 18 June 2014. Prime Minister Nechirvan Barzani, Deputy Prime Minister Qubad Talabani, and all cabinet ministers were sworn into office.

In a speech outlining the programme of the eighth cabinet, Prime Minister Barzani stated that the new cabinet has been announced during a critical point in time. He emphasised that in 2003, the people of Kurdistan needed to act with one voice and work together in order to protect and preserve the achievements and interests of the Kurdistan Region. He noted the need to have the same strategic posture at this difficult period for Iraq in order to not squander any achievements that have been made and to ensure the safety and security of those living in the Kurdistan Region and in parts of Kurdistan outsidenb_parliament_gov_2__2014_06_18_h18m4s30__MZ of KRG administration. For this reason the decision constitutes a historic responsibility for the people of Kurdistan.

The Prime Minister also said that the eighth cabinet is a broad-based government, reflecting the aspirations of the political forces in the Kurdistan Region. Achieving this task required patience during the process of forming such a cabinet in order to construct a real partnership that would respond to the current needs of the people and the political constituencies of the Kurdistan Region.

Prime Minister Barzani thanked the people of the Kurdistan Region for their patience during the government formation process, especially after Iraq’s federal government cut the salaries of KRG employees. He stressed that this unjust and unconstitutional decision has made the lives of the people in the Region more difficult and has also had a negative impact on Kurdistan’s economy and investment. He expressed his sorrow and sadness for the trouble that this situation has caused for the people of Kurdistan. However, he stated that in the coming years the resistance and fortitude of the people of the Kurdistan Region would usher in a new stage in which injustice would be confronted. This would help to settle these issues, and the Kurdistan Region would not face political or financial crises such as this again.

The Prime Minister discussed the plans of the new cabinet, highlighting the fact that all efforts will be made to incorporate a hard-working and transparent government based on the principles of citizenship, separation of powers, peace and social justice, human rights and particularly the rights of women and children, the rule of law and justice, increased prosperity, genuine reform, protection of the Kurdistan Region’s environment, and the identification of appropriate solutions to combat corruption in all of its forms in KRG institutions.

He also explained that citizenship would become the principle, the value, and the primary measurement of government activities. The cabinet will work to provide equal opportunities for all inhabitants of Kurdistan regardless of their political, ethnic, or religious affiliation. In addition, based on the mechanism of the rule of law and institutionalization, the new cabinet will work to ensure that institutions and government duties, authorities, and responsibilities are separate from the activities and duties of political parties.

Prime Minister Barzani reiterated that the eighth cabinet is a coalition government and that its components are genuine partners in this government. This includes at the level of implementing government duties, decision-making, and responsibility for all decisions. This government belongs to everyone in Kurdistan and works for citizens’ prosperity and interests and to provide them with services.

He also indicated that those serving in the cabinet would be committed and qualified to handle the government’s economic, financial, and administrative responsibilities. Members of the government will all be responsible for its decisions, he said, and no side will be an obstacle in implementing the government’s decisions. The different parties that come together to form this cabinet will govern the Region based on the votes and confidence the people have entrusted to it. The government will work resolutely to deliver on the promises made to the people and will serve them.

Prime Minister Barzani pointed out that the participation of various political parties in the coalition government would help to reinforce the foundations of democracy and peaceful coexistence, respecting differences in views, freedom of the press, and governing and working together under the same umbrella. This will bring the tolerance of the people of Kurdistan to a new stage in the Region’s political history.

He also stressed that the government should take significant steps in order to help realize the dreams of past generations: bringing about a self-governing, stable and secure Kurdistan. This is why the government will responsibly identify the necessary steps to be taken for the future.

Regarding the problems between Baghdad and Erbil, Prime Minister Barzani underlined that one of the duties of the new cabinet will be to adopt a reconciliatory policy to settle the unresolved issues and the Region’s future with Iraq’s federal government. This includes, especially, the issue of the areas of Kurdistan outside KRG administration and the implementation of Article 140 of the Iraqi federal constitution. He stressed that together, in coordination with the Region’s presidency, the parliament, and in cooperation with political parties, urgent steps would be taken to establish a negotiation council for political agreement that reflects the will of the people of Kurdistan.

The Prime Minister stated that the eighth cabinet would create a suitable environment to ensure that the parliament can properly monitor the government’s activities. Meanwhile, he sought the trust and support of the parliament so that the government and the parliament work together to serve the people of the Kurdistan Region. To this end, the government will be in constant communication with the parliament and its chairmanship council.

He also pointed out that, as Kurdistan is a relative rich Region, the current objective is to achieve economic independence, continuous growth, and diversification of income sources – thus avoiding reliance on natural resources revenues alone. He said that the government will work to develop various sectors, including agriculture, industry, trade, services, and would strive to reduce the difference in living conditions between towns in the countryside and cities.

Prime Minister Barzani explained that the government will work to improve major water services, electricity, and road networks to meet the clear economic growth and increased standard of living in Kurdistan. The KRG would also promote local and foreign investment by utilizing the Region’s capabilities, materials, and human resources. This requires active work to implement decentralization, separation of powers, and reach an agreement to amend the laws.

The Prime Minister stated that the government will pay special attention to the sectors of industry and tourism and will support the private sector to play its role in reconstruction and propelling the economic growth of Kurdistan. The government will improve the investment framework in Kurdistan in a way to meet the social and economic development for the next stage of the Region. He indicated that the eighth cabinet will continue to reform the education and higher education systems by providing the needed facilities, improving academic capacity, and developing scientific research and vocational studies to create a qualified and capable workforce for the job market. Reducing the rate of illiteracy in the Region will also be a priority.

Regarding the health sector, Prime Minister Barzani explained that the new cabinet will work to adopt a more modern health system and separate public and private sector medical services.

He said that the eighth cabinet will continue to pay attention to the lives and living conditions of the families of martyrs, victims of the Anfal campaign, chemical weapons attacks, and political prisoners.

The new cabinet will reframe its programme regarding the housing sector in a modern way and will work to solve housing issues, especially for low-income families.

The Prime Minister told the parliament that all should be proud of the security and stability that prevail in Kurdistan, despite its location in the heart of an area torn by violence, war, terror, and repression. The situation in Kurdistan has been enabled by the efforts, awareness, and conscientious efforts of the Peshmerga, police, and security forces who work for all the people of Kurdistan. Because of this, the KRG strives to improve the lives and living conditions of the Region’s armed forces and enhance their abilities and skills. Strengthening the sense of national loyalty to the armed forces will be an important task of this government.

The eighth cabinet will work to review and regulate the pension and salary system to benefit people in a fair way. It will work to establish the Kurdistan Fund for Oil Income and the Region’s Petroleum Company, as stipulated by Kurdistan Region Oil and Gas Law number 22 of 2007.

The Prime Minister outlined the cabinet’s plan to develop, support, and encourage the local private sector and provide suitable conditions for foreign companies and investors in order to create job opportunities and reduce the rate of unemployment. This refers particularly to youth and graduates of institutes and universities. The government will adopt modern operational employment policies and strive to eliminate manipulation in the private market, companies, and investment.

The Prime Minister explained that this is the general overview of the coalition government’s action plan, which will form the basis of the policies and projects of the government, and will be reflected in the work and programmes of the ministries.

Prime Minister Barzani concluded by emphasizing that the adoption and the success of the government’s programme will be a success for the resilient people of Kurdistan – people who have suffered for a long time. Providing social and economic services is an honour for the government. The people of Kurdistan deserve a brighter future; they deserve freedom, liberty, and a more robust democracy. With the backing of security, Peshmerga, police forces, and the people, he said that the Region could achieve better results and make greater dreams come true.

Please click here for a list of KRG ministries and departments

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Iraq conflict: Kurds ‘will not help retake Mosul’

Nechirvan_Barzani__2014_03_15_h9m19s3__DKKurdish Peshmerga forces will not help Iraq’s army retake the city of Mosul from jihadist militants, the head of the Kurdistan Regional Government says.

Nechirvan Barzani told the BBC that his “top priority” was to protect KRG-administered areas in the north-east.

He also called for Iraq’s Sunni Arabs to be given their own autonomous zone.

In the past week, Peshmerga fighters have taken control of several cities and towns deserted by Iraqi soldiers in the face of the jihadist advance.

They include the city of Kirkuk, which along with the surrounding oil-rich province of Tamim, is at the heart of a political and economic dispute between the KRG and the Arab-led central government in Baghdad.

‘Wrong policy’

Speaking to the BBC’s Jim Muir in Irbil, Mr Barzani was emphatic that the Kurds’ top priority now was to defend their own areas.

He ruled out using Peshmerga fighters – thought to number around 75,000 – to drive out the Islamic State in Iraq and the Levant (ISIS) from Sunni Arab areas, saying it was not just a question of terrorism.

The KRG’s prime minister blamed the crisis on policies pursued by the Shia Prime Minister in Baghdad, Nouri Maliki, whom Sunni Arabs have accused of discriminating against them and monopolising power.

“It’s not only ISIS. It’s the result of the wrong policy in Baghdad vis-a-vis Sunni areas. It’s about the Sunni community feeling neglected,” he said.

Mr Barzani, the nephew of Kurdistan’s President Massoud Barzani, believed Iraq would never be the same.

“I don’t think it can stay together. As I said: Iraq before Mosul, and Iraq after Mosul. So now we have to sit down and find a formula how to live together, but if we think that Iraq will go back like before Mosul, I don’t think so – it’s almost impossible.”

Creating an autonomous Sunni Arab region might be the answer, he said.

“We have to leave it to Sunni areas to decide, but I think this is the best model for them as well. First, they have to take a decision: what they want exactly. And in our view… the best way is to have a Sunni region, like we have in Kurdistan.”

“There is no trust between Maliki and the Kurds, and even with Shia groups. So, in my view, [a political solution] is difficult,” he added.

Mr Barzani said the US should help Iraq, but only on the condition that Mr Maliki – whose State of Law bloc won the most seats in April’s parliamentary elections – was denied a third term in office.

“If the situation can go back to normal without Maliki, I think they have to do it.”

Iran is reported to be pressing the Kurds to join the campaign against ISIS and its allies. But, our correspondent says, they clearly would not even consider it, without a major change in Baghdad.

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Minister Hawrami: New Iraq needs power-sharing and adherence to constitution to avoid further chaos

The key to Iraq’s unity is power-sharing, revenue-sharing and the implementation of the Constitution, Dr Ashti Hawrami, the Kurdistan Regional Government’s Minister of Natural Resources, told a London conference yesterday.

Dr Hawrami, speaking at the CWC Iraq Petroleum conference, outlined the disputes between Erbil and Baghdad on the KRG’s budget, which Baghdad has unilaterally cut this year, the under-delivery of domestic fuel to the people of Kurdistan, which was 3.4% last year when it should have been 17%, and differences over the Constitution on oil production and exports.

“The policies of centralisation and discrimination have put Iraq’s future at risk,” said Dr Hawrami.‎ “As of last week (following the crisis in Mosul) there is a new Iraq. Iraq needs power-sharing, revenue-sharing and adherence to the constitution. Otherwise we will have more chaos in Iraq.”

Dr Hawrami explained that the federal budget law in 2013 had introduced a minimum export requirement of 400,000 barrels per day by the KRG, but this figure was unrealistic and had been inserted into the budget without consultation with the KRG. He said that the KRG should have received $6 billion as its budget so far this year; instead, it had received $900 million. The KRG has been forced to borrow $3 billion locally and internationally, and it will be able to overcome the budget shortfall by exporting up to ‎250,000 bpd from July, with the aim of increasing to 400,000 bpd by the end of the year.

The minister said that Kurdish oil sales would continue through the Ceyhan port in Turkey and that two tankers of oil had already been sold, with a further two tankers expected to load this week for their agreed buyers.  He outlined that international oil companies have already invested $15 billion in the energy sector so far, and they are required to invest $10 billion more in the next two years. The Minister explained that the oil and gas sector, including services, employs about 33,000 people in Kurdistan, 87‎% of whom are locals.

Dr Hawrami reiterated the articles in the Iraqi Constitution that give the KRG the authority to export oil. He also said that the KRG now had the necessary pipeline infrastructure in place to enable the resumption of export from the Kirkuk oilfields, which have seen no exports since March due to persistent sabotage attacks on export infrastructure outside the KRG controlled area.

He concluded by saying, “Despite all the unfair treatment and discrimination, the KRG reaches out to Iraq and is ready to cooperate, to work together to resolve these problems.”

Click here to see Dr Ashti Hawrami’s presentation at the CWC Iraq Petroleum conference 2014.

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UAE assures project implementation in Kurdistan

The United Arab Emirates Deputy Minister of Economy and Trade, Abdullah Saleh, visited the Kurdistan Region this week to attend the 2014 TradeUAE Iraq conference in Erbil.

The conference included 115 Emirati companies specializing in a wide range of sectors, including energy, the food industry, petrochemicals, construction, as well as companies offering banking and communications services.

Deputy Trade Minister Saleh said that the UAE remains committed to its investment projects in the Kurdistan Region, clarifying that they have not been halted. He attributed delays to minor obstacles, which include bureaucratic issues common in most countries in the region. He said, “The UAE is committed to contribute to the economic growth of Kurdistan, where we have been among the pioneers.”

The Deputy Minister added that business and investment opportunities continue to expand and that this has led to increased opportunities for potential investors in various sectors. He emphasized that the UAE remains committed to investing in Kurdistan as well as expanding its operations and activities, stating that the UAE is not under pressure from the federal government in Baghdad regarding its investment projects in the Kurdistan Region.

Deputy Minister Saleh also said that UAE companies are looking to establish heavy industrial projects to serve the Kurdistan Region as well as Iraq as a whole. He reaffirmed that last year’s conference, the first TradeUAE conference held in Iraq, was also a success and that Erbil will be the gateway for UAE investment. He pointed out that the volume of bilateral trade between Iraq and the UAE exceeds $13 billion, $4 billion of which is invested in Kurdistan, with the majority, $3 billion, dedicated to Erbil.

UAE Consul General Rashid al-Mansouri said that there are more than 120 Emirati companies operating in the Kurdistan Region. He said, “The UAE is committed to strengthening relations with the Kurdistan Region politically and economically, and we will work together towards a strong, strategic relationship.”

The Consul General added, “The UAE will continue to bolster its presence in the Region. We will increase the number of flights, and the Abu Dhabi Islamic Bank will open in the near future. Large Emirati companies, such as Taqa and Maydan for housing and construction, as well as a number of state-owned companies will begin work here after the requisite legal procedures are finalized.”

Mr Rashid Al-Jarwan, Executive Director and Board Member of Dana Gas, told KRG.org that Dana Gas has been able to extract more than 100 million barrels of oil suitable for local consumption since it began operations in Kurdistan in 2007. He added that Dana Gas extracted more than 340 million cubic feet of natural gas in the Khormor field. The gas has been used to generate electricity through a 180-kilometre pipeline, and the Kurdistan Region currently produces 1600 megawatts of electricity per day from this supply of gas.

Al-Jarwan said that Dana Gas remains committed to its production level targets and hopes to increase those levels in the coming years. He added that TradeUAE Iraq 2014 provides opportunities for large Emirati companies to contribute to the successful implementation of projects in Kurdistan, which will also enhance the confidence of new investors. He stated that disputes between Baghdad and Erbil have not affected the UAE’s economic activities in the Kurdistan Region, and that the UAE plans to increase its trade volume with Iraq and with the Kurdistan Region in particular.

The conference was attended by Head of the KRG Department of Foreign Relations Minister Falah Mustafa, Governor of Erbil Nawzad Hadi, President of the Kurdistan Region Chambers of Commerce Dara Khayat, UAE Deputy Minister of Economy and Trade Abdullah Saleh, UAE Consul General Rashid al-Mansouri, and a number of KRG and UAE government officials and private sector representatives.

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Nechirvan Barzani and Qubad Talabani tasked to form 8th Cabinet

Kurdistan Region President Masoud Barzani has signed an order tasking Prime Minister designate Nechirvan Barzani and Deputy Prime Minister designate Qubad Talabani to form the eighth Cabinet of the Kurdistan Regional Government.

Prime Minister Barzani will continue in his role in the same capacity, while Minister Talabani will move from his current role as Head of the KRG Department of Coordination and Follow-up to Deputy Prime Minister.

According to Kurdistan’s laws, the cabinet must be formed within 30 days of the issuance of the President’s order. This decision signals the final step in the government formation process, and paves the way for an eighth cabinet coalition to include a number of political parties.

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Prime Minister Barzani addresses Kurdistan Parliament

The Prime Minister yesterday addressed the Kurdistan Parliament at length regarding the Region’s financial situation, disputes with Baghdad, natural resources, and other matters. An excerpt of his address is below:

“The Kurdistan Region’s policy from the beginning has been based upon solving outstanding issues with Baghdad. We want to find a solution and reach an agreement. Baghdad’s policies are, however, not reasonable. We have recently made several visits to Baghdad, and since 2005 we have made every effort to reach an agreement regarding budget distribution, but we have not yet reached a resolution…

Regarding oil, we have just begun exporting. This step has been taken after two years of negotiation with Turkey in which an agreement has been signed that permits the Kurdistan Region to export its oil. We are thankful to our Turkish counterparts for reaching such an agreement and for implementing it to the fullest…

Regarding the federal budget, we had only been receiving 10% instead of the 17% to which the Kurdistan Region is entitled. We have continuously taken initiatives to solve these financial problems, and have made several visits to Baghdad…

We are abiding by the Article in Iraq’s Constitution which states that the oil and gas are owned by all the people of Iraq. We are ready to cooperate with Baghdad and SOMO regarding the export of oil, including monitoring volumes so that they know precisely how much oil is being exported. We have suggested working with SOMO in both the tendering process, the selling process and in order to ensure transparency. We will work together in this, but we will not cede control to SOMO…

As for their request for transparency, we are open to include SOMO in every stage of the process and whatever they request under the condition of our receipt of 17% of the budget share. Again, what we are receiving is only 10%. What the KRG is offering in terms of delivery to its citizens differs [from the rest of Iraq]; therefore, today our people have higher expectation from their government and this is their right…

America is aware of the details of the outstanding issues between our Region and Baghdad. In fact, I believe that the American policy reflects the fact that the United States encourages both parties to reach an agreement that is suitable for both Baghdad and Erbil. This is our expectations of America – that they remain neutral. And this how they have acted so far…

According to Iraq’s budget law, the Federal Iraqi Government was supposed to provide the budget on a monthly basis to all of Iraq’s provinces and to the Kurdistan Region. From the start of this year until today, the Federal Government of Iraq has sent money to all of Iraq’s provinces except for the Kurdistan Region. From the beginning of the year, Iraq has sent only one trillion dinar to the Kurdistan Region. We would like to thank those local companies who have provided us with loans. In addition, we have borrowed from some foreign banks, and we also thank them. The government in Baghdad is supposed to have sent six trillion additional dinar which they have not and are not willing to provide to the Kurdistan Region…

Today I would like to say that the policy of the Kurdistan Region Government is to never take a step backwards. We want to reach resolutions with Baghdad through dialogue, but if we do not arrive at any resolutions then we have other alternatives and we will take them. We will not stop here. Why have we started selling oil? This is so that Baghdad understands full well that we are able to do this. In their eyes the KRG is overstepping its rights, and is unable to reach a point where we can openly sell our oil. But we have proved to them that we are capable of doing so…

The Kurdistan Region will soon be able to export 250,000 barrels per day. This economic independence is vital for the Kurdistan Region. We have achieved many gains through the policies that the KRG has implemented. Without the support and backing of you, the Members of Parliament, and the public, then undoubtedly we will fail. Baghdad cannot defeat us, but if we are not united in supporting these policies, then we will face crisis…

We will continue selling our oil through the Ceyhan port in Turkey to the international market, and we will try to reach an agreement with Baghdad. Our doors are always open for negotiations. Our process of selling oil has in every respect been in accordance with the policies and mechanisms also used by SOMO, without any shortcomings. We have been very careful to avoid causing any problems during the process and we will continue to pay strict attention to transparency, because the disputes are significant and are sensitive to both sides. We will work as hard as possible to ensure that our oil export process remains transparent. This is in order for the Kurdistan Region to avoid any liabilities or accusations. This process has supporters but also has its detractors. We do not want to face any problems with this issue…

It is with confidence that I tell you that we have started exporting oil and we believe we will reach a milestone at the end of the year, at which time we will able to export up to 500,000 barrels per day.”