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Iraq has been unable to pay the KRG 17% of federal spending as per a December accord because it has no cash, says KRG Prime Minister Masoud Barzani. Erbil will, for now, honor the accord to supply its own crude for marketing by Iraq’s state marketer SOMO, but will not do so indefinitely, he says.
Obviously, we have an agreement with a bankrupt country,” Mr Barzani told reporters on 16 February after talks in Baghdad with Iraqi officials to try to resolve outstanding issues that stand in the way of a long-term accord. These issues include revenue sharing, the legality of oil contracts and disputed territories. Erbil will live up to the agreement to supply 250,000 b/d of its own crude and facilitate the export of 300,000 b/d of Iraqi oil through its pipeline, he adds. But he warns that should Baghdad fail to uphold its side of the bargain, the agreement will become invalid: “If they don’t send the budget, we won’t send oil.”
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