Erbil and Baghdad agree on reimbursing oil companies

September 15th, 2012 11:20 am

ERBIL, Sept. 15 (AKnews) – Iraqi government and the Kurdistan Regional Government (KRG) have verbally agreed on solving the issue by increasing KRG’s oil exports and reimbursing the suspended dues of foreign oil companies operating in the Kurdistan Region.

KRG and Iraq are expected to sign the agreement this week, according to KRG’s website.

The agreement was made Thursday in a meeting, chaired by Rojh Nouri Shawais, Iraq’s deputy Prime Minister.

A number of Iraqi officials attended the meeting including Finance Minister Rafia Isawi, Trade Minister Kherullah Hassan, Oil Minister Abdul-Karim Luaibi, Head of Financial Audit Office and KRG’s Minister of Natural Resources Ashti Hawrami.

According to the agreement the region must maintain its export volume via Baghdad as before (140, 000 barrels per day) but should increase it to 200,000 bpd in the next three months.

In turn, the Iraqi Government will pay 1tr IQD as an advance payment to KRG to pay off the suspended dues of the companies which are working in its oil sector.

Under a political agreement the KRG exports oil through Baghdad and the Iraqi government should fund the investigating companies in the Region. Long suspension of the dues of the companies led KRG suspend its exports temporary and this created tensions between the two sides.

Baghdad has not paid Genel and a number of small companies yet for the majority of oil exported in 2009 and 2011.

The region wants to end the payment dispute with Baghdad. According to the KRG, Baghdad has to pay $1.5bn to companies making investments in the region.

According to the verbal agreement the KRG must determine the size of its oil export in 2013 and the debt of the companies so that these data are considered while fixing the Iraqi budget for the next year.

Both sides also agreed that the ratio of the Region’s imported refined oil from Baghdad should be %17. By this agreement Baghdad is providing %17 of the fuels to power stations in the region.

It was also decided during the meeting that a number of small joint committees from Baghdad and KRG representatives should be created to follow up the size of oil output, refined oil, reimbursing foreign companies.

The parties made it clear that stepping back from the agreement or infringing any of its clauses will be counted as violating the entire agreement.


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