Iraq amends Budget Law to pay oil firms operating in Kurdistan, says official
Shafaq News/ The Iraqi government has revised the national budget law to guarantee payments to international oil companies working in the Kurdistan Region, Deputy Prime Minister for Energy and Oil Minister Hayan Abdul Ghani announced on Wednesday.
Speaking at the 9th Sulaimani Forum, Abdul Ghani revealed that negotiations between Baghdad and the Kurdistan Regional Government (KRG) led to the amendment, designed to cover operational costs for energy companies in the semi-autonomous region.
'The budget law has been updated specifically to facilitate payments to companies operating in the Kurdistan Region,' Abdul Ghani explained, adding that a formal letter, signed by the Iraqi finance minister, has been issued to ensure these payments. 'This move has reassured producers and alleviated their concerns.'
Abdul Ghani also pointed out that oil produced in the Kurdistan Region is counted as part of Iraq's national quota under the Organization of the Petroleum Exporting Countries (OPEC). To comply with OPEC limits, the federal government had to reduce its own production, which has negatively affected Iraq's overall export capacity.
His comments come ahead of a high-level meeting scheduled between Baghdad and Erbil on Saturday to discuss the resumption of oil exports from the Kurdistan Region.
Exports through the Iraq-Turkiye pipeline were halted in March 2023 following an international arbitration ruling in Paris, which determined that Turkiye violated a 1973 agreement by allowing the KRG to independently export oil without Baghdad's approval.
The stoppage blocked approximately 450,000 barrels per day of crude, cutting off the KRG's primary revenue stream. This disruption has strained the Kurdistan Region's finances, triggered production cuts, and increased reliance on budget transfers from the federal government.
Abdul Ghani noted that Prime Minister Mohammed Shia al-Sudani's recent visit to the Kurdistan Region and his discussions with local officials were instrumental in accelerating the negotiations and facilitating recent agreements.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Iraq Business
an hour ago
- Iraq Business
Businessmen Arbitrarily Detained in Iraq Released
By John Lee. Ireland's Tánaiste (Deputy Prime Minister) and Minister for Foreign Affairs, Simon Harris, has confirmed the release on bail of Robert Pether, an Australian engineer resident in Ireland, who has been imprisoned in Iraq since 2021. The announcement comes following a phone call from Iraq's Foreign Minister, Fuad Hussein, who personally informed the Tánaiste of the development. Pether, who remains in Iraq for now, has been at the centre of an ongoing diplomatic effort by the Irish government. Minister Harris described the release as " very welcome news " in what has been a " long and distressing saga " for Pether's wife and family. The Tánaiste also thanked Irish diplomatic staff in the region for their continued support and advocacy. He reiterated concerns about Pether's health and outstanding legal charges but expressed hope for a positive resolution and Pether's eventual return to his home in Roscommon. Pether and his Egyptian colleague, Khalid Radwan, were detained in April 2021 in relation to a dispute over the construction of the new Central Bank of Iraq (CBI) headquarters in Baghdad. They have been sentenced to five years in prison and jointly fined $12 million on charges of fraud. Their families claim they were tricked into travelling to Iraq to attempt to resolve the dispute. The UN Working Group on Arbitrary Detention found that they were " arbitrarily detained on discriminatory grounds ", and referred the case to the Special Rapporteur on torture. In February 2023, the International Chamber of Commerce's (ICC) Court of Arbitration ruled that the CBI was at fault in the dispute, and ordered it to pay $13m to Abu Dhabi-based Cardno ME (CME). The statement from the Irish Tánaiste did not refer to Radwan, but AFP news agency cites an Iraqi official as confirming his release. (Sources: Irish Department of Foreign Affairs and Trade; AFP)
Iraq Business
an hour ago
- Iraq Business
Baghdad and Erbil Exchange Sharp Words over Oil Revenue Dispute
By John Lee. Iraq's federal Ministry of Oil and the Kurdistan Regional Government (KRG) have issued competing statements over the longstanding dispute regarding oil production and revenue sharing, highlighting the continued impasse that has cost the country billions of dollars in lost exports. Federal Government Position The federal Ministry of Oil in Baghdad has demanded that the Kurdistan Regional Government comply with the constitution, federal court decisions, and budget laws requiring the handover of oil produced in Kurdish territory to federal authorities for export. The ministry stated that despite sending official correspondence and delegations to the KRG, these efforts have proved fruitless. According to the federal ministry, the KRG's continued non-compliance is causing significant financial losses to Iraq through two mechanisms: firstly, by preventing the federal government from receiving and exporting Kurdish oil, and secondly, by forcing the ministry to reduce production from other Iraqi fields to comply with Iraq's OPEC quota, which includes Kurdish production regardless of compliance issues. The ministry also accused the KRG of continuing to smuggle oil outside Iraq and warned it would pursue all legal measures whilst holding the regional government fully responsible for such activities. Kurdish Regional Government Response The KRG's Ministry of Natural Resources issued a detailed rebuttal, characterising the federal statement as "political" and divorced from objective facts. The regional government accused Baghdad of violating the constitution and blocking the passage of a federal oil and gas law for years, instead relying on what it termed outdated centralised legislation from 1976 that contradicts federal principles. The KRG defended its constitutional right to manage its natural resources, stating that international oil companies would not have invested billions of dollars without proper legal foundations. The regional government claimed it had fulfilled all commitments regarding export resumption, including agreeing to sell oil through the federal marketing company SOMO and deposit revenues in the state treasury. Regarding smuggling allegations, the KRG accused federal authorities of engaging in widespread corruption and oil smuggling in southern Iraq, citing local and international reports. Financial Impact and Technical Details The dispute has resulted in the suspension of Kurdish oil exports since 25 March 2023, following legal action by Iraq's federal oil ministry against Turkey's energy ministry. The KRG stated this stoppage has cost the federal government, the region, and oil companies more than 25 billion dollars. The regional government reported delivering over 11.8 million barrels of oil to federal refineries over five months without receiving any payment, leading to production companies' reluctance to continue deliveries. The KRG also noted that budget law provisions setting production costs at six dollars per barrel have discouraged most companies from maintaining production levels. Ongoing Negotiations Both sides referenced attempts to resolve the dispute through joint committees and negotiations. The KRG emphasised its flexibility and readiness to cooperate, whilst the federal ministry maintained that previous discussions had been unsuccessful. A joint committee was established to draft federal oil and gas legislation, though the KRG accused federal authorities of delays in pursuing this critical file. The dispute continues to highlight fundamental disagreements over the interpretation of Iraq's federal constitution and the respective roles of Baghdad and Erbil in managing the country's oil resources. Click here to read the original statement from the Federal Ministry of Oil [Arabic] Click here to read the original statement from the Kurdistan Regional Government [Arabic] (Sources: Federal Ministry of Oil; Kurdistan Regional Government)
Shafaq News
2 hours ago
- Shafaq News
Geimer shortage shadows over Eid Al-Adha morning in Diyala
Shafaq News/ Amid Eid al-Adha prayers and festive greetings in Diyala's streets, families upheld a cherished tradition of serving Geimer al-Arab for breakfast. This year, however, the beloved treat was hard to find. By early morning, shops across the province reported a complete sell-out of Geimer, driven by surging demand and a limited supply, pushing prices to record highs. The cost of one kilogram soared to 40,000 Iraqi dinars, double the typical price range of 15,000 to 20,000 dinars on regular days. In Baqubah's Al-Muallimeen neighborhood, local shop owner Ammar Ali described the unusual pace of sales. All available stock had been reserved or sold out by 8 a.m., with customers placing advance orders the previous night. Some buyers requested large quantities, enough for extended family gatherings and guests. The spike in prices reflects not only the seasonal demand but also a broader issue: a decline in traditional production. Geimer, typically made through labor-intensive, manual methods in rural areas, faces growing constraints. Producers in surrounding villages have scaled back due to drought conditions and a lack of government support for the livestock sector. With most urban markets relying on these rural suppliers, the supply chain has struggled to meet the Eid rush. "Geimer production can't keep up without formal, regulated facilities to fill the gap," Ali noted. In another part of Baqubah, near Al-Quds intersection, resident Mohammed Jameel Abu Ghaith recounted a taxing morning. After visiting six shops without success, he eventually found just a quarter-kilogram of Geimer in the Khuraisan area, paying 10,000 dinars for it. Abu Ghaith urged authorities to invest in rural communities where buffalo herding and Geimer production are inherited livelihoods, warning that dwindling numbers of producers in areas like Baqubah's outskirts, Jalawla, and Al-Khalis could lead to the disappearance of a cherished culinary staple from Diyala's Eid traditions.
