Iraq’s federal government and the Kurdistan Regional Government (KRG) ended years of discord over resource management with a deal that will see both sides benefit from increased oil sales and revenues. Yet with global oil prices at a five-year low in an oversupplied market, the addition of more Iraqi barrels will not be welcomed by rival producers.
Iraqi Oil Minister ‘Adil ‘Abd al-Mahdi said on 2 December that the KRG had agreed to hand over 250,000 b/d of Kurdish crude to Iraqi state oil marketer SOMO for marketing. This is a reversal of the KRG’s long-stated refusal to cede control of its crude to the federal authorities, which it argued has been short-changing the semi-autonomous region for years. The agreement reached in Baghdad during a visit by KRG Prime Minister Nechirvan Barzani will also see 300,000 b/d of crude oil from the Kirkuk field, now under Kurdish control, to be exported through Kurdish territory to Ceyhan in Turkey. All revenues will be deposited in the Federal Reserve Bank of New York to be disbursed by the Iraqi federal authorities. (CONTINUED - 2294 WORDS)