KRG Ministry of Natural Resources

26 March 2012

Erbil, Kurdistan Region - (KRG.org) - Oil exports from the Kurdistan Region have been reduced to 50,000 barrels per day and may terminate within one month if the federal government in Baghdad continues to withhold payment from the producing companies, a spokesman for the Kurdistan Regional Government's Ministry of Natural Resources said today.

The KRG remains committed to the export target of 175,000 barrels of oil per day contained in the 2012 Iraq budget and “could export significantly more” if the federal government honours its commitments to pay, the spokesman said. 

However, he added, “Because of the production costs and the re-investments needed by the producing companies in the Region, the MNR has reluctantly decided to reduce exports to 50,000 bpd with a view to possible cessation in one month unless payments are forthcoming.” 

Under a settlement reached in January 2011, pending the passage of federal hydrocarbon and revenue sharing laws, the federal government agreed to pay to the KRG 50 percent of export revenues from the Region in order that the contractors recover their contractual entitlements. It was agreed that payments would be timely and regular. 

“We still remain hopeful that the authorities in Baghdad will realise the damage being caused to Iraq’s economy by their continued failure to comply with their commitments,” the spokesman said. 

“Two payments totalling $514million were received in early 2011, the last being in May,” the spokesman said. “Ten months have now passed without payment.” 

The spokesman said that MNR calculations show that the federal government now owes the KRG close to $ 1.5billion. 

“We still remain hopeful that the authorities in Baghdad will realise the damage being caused to Iraq’s economy by their continued failure to comply with their commitments,” the spokesman said.