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Prime Minister Barzani addresses Kurdistan Parliament

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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.”

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Prime Minister Barzani addresses Kurdistan Parliament’s Oil & Gas and Legal Committees

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Prime Minister Nechirvan Barzani yesterday conducted a lengthy meeting with the Kurdistan Parliament regarding natural resources policy and budgetary matters.

Kurdistan Parliament Speaker Dr. Yousif Mohammed, heads of the parliament’s political blocs, the Oil & Gas Committee, and the Legal Affairs Committee all participated in the session. The Prime Minister, Minister of Natural Resources Dr. Ashti Hawrami, and KRG Council of Ministers Legal Advisor Dr. Amanj Raheem answered questions from Members of Parliament and discussed oil export and the road forward.

An excerpt of the Prime Minister’s address is below, as well as his response to two questions from Members of Parliament.

Prime Minister’s address

“The issue of energy is highly important to us. It has no relations to party politics, nor is it a personal matter. It is related to the Kurdistan Region in general and in reality it is quite a sensitive issue and it is essential that the Parliament, in its role as the legislative institution, be fully informed on the details of this issue. Our policy has been created within the framework of the laws that have been established by the Kurdistan Parliament and hence the parliament should be privy to all the details related to this issue.

“The big question is: ‘who will control the oil’? Counterparts in Baghdad did not identify ‘right’ or ‘wrong’ KRG actions – they just wanted to control the issue completely. We do not view this issue as a path towards Kurdistan’s independence, but rather as the expression of our constitutional rights. These rights are the constitutional principles upon which we agreed when we returned to Iraq in 2003 and 2004, and they have to be implemented in Iraq.

“If Baghdad today agreed with us upon the issue of oil revenue sharing, one of Iraq’s most important laws, it would lead to the resolution of a number of obstacles related to this issue. However if I speak frankly, Iraq’s federal government increases the sovereign expenditures year after year without the Kurdistan Region’s knowledge, and this is reduced from Kurdistan’s share of the Iraqi budget.

“At a time when Baghdad regularly increases its sovereign expenditure, the burden placed upon the KRG increases and citizens’ expectations of the government, in terms of services, are considerable. This is the right of citizens, and they are fully entitled to these demands. In addition, we have a large number of civil servants on the government payroll in Kurdistan. For your information, 850 billion Iraqi dinars per month are spent on the salaries of civil servants. This is a very large figure and it needs to be addressed. It cannot continue in this way.

“In order to reach international standards…we need more than $US 31 billion to meet the demands for infrastructure in Kurdistan such as highways and roads, bridges, schools, hospitals and other essential needs.

“We are determined to carry out our constitutional rights and to ensure that we receive from Baghdad the full 17% of the Kurdistan Region’s share of the budget.

“In last week’s session we provided solid clarifications. And today we have come here because without doubt esteemed Members of the Kurdistan Parliament, as members of the legislative institution in Kurdistan, have many questions that they would like to see answered. The aims of Members of Parliament are to determine whether the KRG’s oil policy will be successful or not, as well as to understand the government’s future plans. This includes the manner in which the KRG plans on spending the revenue we receive.

“We want to address these questions openly and transparently in Parliament today so that we can reach a mutual consensus regarding the energy issue in Kurdistan. And just as Speaker of Parliament Dr. Yousif explained, we want energy to be a national issue and to resolve doubts about its transparency. We are ready to answer these questions in front of the Kurdistan Parliament, as it is our legislative institution, and so we are ready to attend any time to be questioned and to be held accountable.

“We fully believe that the achievements of the KRG are in the best interest of the Kurdistan Region, and are in accordance with the Iraqi Constitution. We are confident. But the task is not easy; in fact, is it quite difficult.

“The main requirement for the success of this process is a united stance among all of Kurdistan’s political parties on this issue.”

Responses to questions from Members of Parliament

In response to questions from Members of Parliament regarding the position of the United States, Prime Minister Barzani stated that the policy of the United States is and has been to support both Baghdad and Erbil in efforts to reach an agreement, as has been reiterated by American diplomats on every occasion. The KRG wished that, when considering the oil issue, the United States had pointed to Baghdad’s unilateral and unconstitutional decision to cut the Kurdistan Region’s share of the budget. The KRG resorted to exporting oil following Baghdad’s decision to cut the budget of the Region, an act that has affected the payment of salaries of civil servants. The KRG has been forced to pursue a solution because of this action.

In response to questions regarding the agreement between the Kurdistan Region and Turkey, the Prime Minister stated, “We should not view this issue as political. We have held meetings with our Turkish counterparts over a lengthy period of time, and it culminated in a protocol for long-term cooperation on energy issues and is subject to extension. The agreement was a result of a long series of meetings. We do not consider this to be a political move to divide Iraq. That is not the case.”