Iraqi Kurdistan to continue independent oil exports

09 June 2014

‘This is a turning point in our history’, says regional government’s foreign minister

The Kurdistan Regional Government (KRG) in Iraq plans to continue exporting crude independently despite opposition from the Baghdad central government and the US, the region’s foreign minister asserted at MEED’s Kurdistan Projects conference in Erbil on 9 June.

The semi-autonomous region announced on 23 May that it had sold its first shipment of oil to the international market via a pipeline to the Turkish port of Ceyhan, sparking legal action from Baghdad against Turkey.

“This is an enormous step for the future of the region,” Falah Mustafa Bakir, head of the Department of Foreign Relations, told delegates at the conference. “We are now a proud supplier and we are able to boost our economy with oil revenues that we intend to share with the rest of Iraq.”

The conflict between the KRG and Baghdad has led to Iraqi Kurdistan being frozen out of Iraq’s central budget for the past six months.

“We will not give up what we have started in Kurdistan,” said Bakir. “We wanted to be partners in this country and we have tried every possible means in order to share the wealth with the rest of Iraq, and Baghdad was not ready to share it with us. Indeed Baghdad deprived us of our share of the budget and the revenues.”

“This is a turning point in our history and we believe it will not be without challenges. Iraq as a country tries its best in order to stop it, but we will certainly find friends and buyers in the international market. If you are able to transfer oil to the international market, it will certainly find buyers.”

The minister said a second tanker of Kurdish crude would be leaving Ceyhan “soon”.

Iraqi Kurdistan has the capacity to export 100,000 barrels a day (b/d) of crude oil via Turkey and aims to increase exports to 1 million b/d by 2019.

Bakir, in a repeat of recent statements by KRG Prime Minister Nechirvan Barzani, implied that the KRG is not willing to work with Iraq Prime Minister Nouri al-Maliki to form a new government following the parliamentary election on 30 April.

Al-Maliki’s Shia-dominated State of Law party emerged from the elections with the strongest share of the vote and is now attempting to form a government with other coalitions in parliament.

“We hope this election will provide the last opportunity for all those that want the future of Iraq to get together, abide by the constitution, adhere to its principles and make sure they make the right choice for a better future,” said Bakir. “Otherwise we will be obliged to take a position.”

The KRG has developed strong relations with neighbouring Turkey and aims to expand its independent diplomatic presence with other key powers in the region and worldwide. Bakir said the region’s ties with the international community “are our greatest defence against a repeat of our painful past”.

Bakir was critical of the US’ reaction to the KRG’s independent oil sales, saying Washington is not putting enough pressure on Baghdad to restart budgetary payments to the region.

“What Baghdad wants is for us to go back to the era of pre-1991 and for us not to have any power or be partners in the decision making,” said Bakir.

“The Americans are telling us they are neutral and are putting pressure on both sides, but we in the KRG don’t see that. What we see is that they are exerting more pressure on the KRG than they are exerting on Baghdad. Had Baghdad come forward, we should not have taken that step. Baghdad started an economic war against the region.”

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