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.