Kurdistan oil production 'justified,' in compliance with OPEC decision: KRG

The KRG said the cost of oil production in the autonomous region "is justified by the complex structure and nature of the Kurdistan Region’s fields."
An oil field in the Kurdistan Region. (Photo: Archive)
An oil field in the Kurdistan Region. (Photo: Archive)

ERBIL (Kurdistan 24) – The Kurdistan Regional Government’s (KRG) Ministry of Natural Resources on Monday responded to the recent statements Iraq’s oil minister made about the Kurdistan Region’s oil.

In a recent interview with Iraq’s Sharqiya TV, Iraqi Oil Minister Ihsan Abdul-Jabbar made comments about “a number of issues related to the Kurdistan Region’s oil,” the KRG Ministry of Natural Resources said in a statement.

According to the KRG statement, Abdul-Jabbar referred to oil production costs in the Kurdistan Region compared to Iraq; the status of Kirkuk’s oil fields; the autonomous Kurdish region’s compliance with OPEC; and called for the decentralization of the KRG’s oil dossier.

Oil production costs in Kurdistan

The KRG said the cost of oil production in the autonomous region “is justified by the complex structure and nature of the Kurdistan Region’s fields, in so much that extraction costs more than Iraq’s oil fields.”

The statement added that oil prices in the Kurdistan Region are lower than the world market “to remain cost-effective” amid “problems and obstacles placed on the region’s oil by the federal government and the SOMO company [State Organization for Marketing Oil].”

The KRG ministry reminded Abdul-Jabbar that “the Kurdistan Region has the right to extract and sell its oil,” adding that the Iraqi Constitution recognizes Iraq as “a federal and decentralized state.”

“The request to hand over the region’s oil dossier [to SOMO] is an unconstitutional request,” the statement continued. “We are always prepared to resolve issues between us, in line with the constitution, and reach a mutually-beneficial agreement.”

Indeed, senior KRG officials have reiterated the Kurdistan Region’s readiness to hand over the income of 250,000 barrels of oil per day to the Federal Government of Iraq, so long as Baghdad provides the people of Kurdistan their financial entitlements and rights.

Compliance with OPEC’s decisions

In its statement, the KRG ministry underlined that the Kurdistan Region has adhered to the Organization of the Petroleum Exporting Countries (OPEC) decision on the production of 430,000 bpd. The KRG “only allocated about 25,000 barrels for domestic use [while] the federal government has set aside one million barrels for domestic use,” it added.

The ministry called on the Iraqi government to “reduce its production, not ask the region to do so” as the autonomous Kurdish region “has reduced its production by 30,000 bpd, in adherence with reduced oil production globally.”

“The Kurdistan Region produces far less than its entitled share. It is the Iraqi government that has produced oil more than it should.”

Governance of Kirkuk’s oil field

On the comments Abdul-Jabbar made about the oil fields in the disputed province of Kirkuk belonging to the federal government in Baghdad, the KRG Ministry of Natural Resources said the matter must be resolved in line with the Iraqi Constitution.

According to Article 140 of the constitution, a referendum was supposed to take place to resolve the matter of whether Kirkuk and other disputed areas should be governed by the KRG or the Iraqi government. No such referendum has happened, and the status of the disputed regions remains one of the main obstacles in relations between Erbil and Baghdad.

“Once again, we express our readiness to resolve issues related to the oil dossier in a way that is in the interest of both sides and of the citizens of Iraq,” the statement concluded.

Editing by Karzan Sulaivany