ERBIL (Kurdistan 24) – The Iraqi government announced on Thursday that, according to a new agreement, the Kurdistan Region will hand over 250,000 barrels per day (bpd) of crude oil to the Iraqi Oil Marketing Company (SUMO) starting on the first of the year.
The Kurdistan Regional Government’s (KRG) Minister of Finance previously stated that Erbil would begin delivering the oil to Baghdad within the framework of the agreement between the two which was also to include Iraq dispursing the Kurdistan Region’s allotment of the 2020 national budget.
For the first time, Kurdistan Region will participate in preparing the budget bill for 2020, instead of merely having a chance for Kurdish lawmakers to vote on it when submitted to parliament, as in past years' budgets.
Iraq’s Oil Minister, Thamer al-Ghadhban, said in an interview with Al-Sabaah newspaper that “The KRG and Iraq Federal government are serious in solving the oil issue, in which several negotiations with the Kurdish delegation occurred regarding how to move forward.”
“The last two meetings were an intensive discussion on the national budget bill, finding joint mechanisms on how to calculate the Kurdistan Region's share,” added al-Ghadhban.
He also said, “We agreed that Kurdistan Region's production capacity should be no more than 450,000 bpd as it affects Iraq’s production share in the Organization of the Petroleum Exporting Countries (OPEC),” explaining that the agreement will be put into effect starting from Jan. 1, 2020.
The minister also mentioned that, according to current plans, 2020 oil exports from Iraq are set to total 3.8 million bpd, including the 250,000 from the Kurdistan Region.
Following a near-total breakdown of ties between Erbil and Baghdad following the Kurdistan Region's September 2017 independence referendum, the governments have converged on a range of issues, especially after Prime Minister Adil Abdul Mahdi came into office in late 2018. The 250,000 bpd per month amount was agreed upon between Erbil-Baghdad as relations began to improve but has never been carried out.
Editing by John J. Catherine