Iraq says minister’s comments ‘distorted’ after KRG denies oil smuggling allegations

The KRG "has already reduced its production after the OPEC plus agreement, and its recent gross production figures have been well below the fair pro rata levels compared with the rest of Iraq."

ERBIL (Kurdistan 24) – The Iraqi government said on Thursday that remarks made by its finance minister alleging oil smuggling in the Kurdistan Region were “distorted” after authorities in the autonomous region firmly denied and condemned the claims. 

“These allegations are baseless, are completely speculative and are made without any evidence,” a Kurdistan Regional Government (KRG) statement said in response to comments that Minister Ali Allawi made on Tuesday at a virtual conference titled “Powering Iraq,” according to S&P Global.

During the event, Allawi pointed the finger at the Kurdistan Region as a possible source of oil smuggling, leading to apparent overproduction. Allawi claimed, “There may be unknown amounts of smuggling also taking place in the [Kurdistan Region], which produces between 450,000 and 470,000 b/d of crude.”

This is amid an oil production cutback deal among the Organization of the Petroleum Exporting Countries (OPEC), including Iraq and additional non-member states such as Russia and Mexico.

"There might be leakages from some other [Kurdish] oil fields, or there might be leakages that go into trucking to various points, but we are not aware of the amounts," Allawi added.

The KRG responded by saying that it “has already reduced its production after the OPEC plus agreement and its recent gross production figures have been well below the fair pro rata levels compared with the rest of Iraq.”

It also noted that the Kurdistan Region’s data on oil exports and production is “independently audited and published regularly” by an independent firm and called on the federal Iraqi government to take similar measures “to create greater transparency and accountability in the oil sector throughout all of Iraq.”

The statement added that Erbil will continue to “act responsibly in its oil and gas operations” as “part of a wider dialogue aimed at bringing certainty to our relationship and ensuring that the rights and duties of both parties are respected in accordance with the constitution.”

A statement from the federal finance ministry asserted that the KRG “responded to a distorted and inaccurate transcript of the interview, drawing the wrong conclusions.” It added further that “the comments attributed to the finance minister were incorrectly reported.”

Editing by John J. Catherine