BAGHDAD — An Iraqi Kurdish official said Tuesday that the country’s self-ruled northern Kurdish region has suspended oil exports over a payment row with Baghdad, a development that could add to already souring relations between the Kurds and the Arabled central government.
Since the 2003 U.S.-led invasion, the Kurds have unilaterally struck more than 50 deals with foreign oil companies, even though Baghdad says they have no right to do so. In 2011, the two sides reached a tentative deal by which the Kurds send the oil to Baghdad, which sells it, and pays 50 percent of the revenue to the developers to reimburse the development costs.
In April, the Kurds halted exports of around 100,000 barrels a day, saying that Baghdad had made only two payments under the agreement and had failed to pay $1.5 billion they say they were owed.
Four months later, the Kurds agreed to restart exports as a good-will gesture. That allowed the two sides to reach a new agreement under which Baghdad would pay about $848 million to the companies in September.
However, Ali Hussein Balo, the adviser of the Kurdish Ministry of Natural Resources, said Baghdad sent only about $550 million and withheld the rest. That prompted the Kurds’ latest move.
“The region has found itself forced to halt the oil exports as Baghdad didn’t fulfill a commitment it made in the September agreement in regard to payment,” Balo said over the phone from the self-ruled region’s capital, Irbil.
He said the Kurdish region of Iraq was exporting around 180,000 barrels a day before recently starting to decrease the shipments. He didn’t say when exactly exports were halted but said it was in the past few days.
Faisal Abdullah, the spokesman for Iraq’s deputy prime minister for energy affairs,confirmed that the full amount wasn’t paid. He said the payments were suspended because the Kurds were pumping less than the 200,000 barrels a day they had pledged. He wouldn’t give more details.
The latest move could dash Iraq’s hopes to pump 3.7 million barrels a day and to export 2.9 million barrels a day next year. Daily production last month averaged about 3.2 million barrels and daily exports averaged 2.62 million. A barrel is 42 gallons.
Iraq sits atop the world’s fourth largest proven reserves of conventional crude, about 143.1 billion barrels, and oil revenue makes up 95 percent of its budget.
In addition to the dispute over development oil resources, the Kurds and the central government in Baghdad have been in a long-running dispute over lands claimed by the Kurds and power sharing. Along with Sunni Arabs, the Kurds accuse the country’s Shiite Prime Minister Nouri al-Maliki of consolidating power in his hands and marginalizing political opponents.
Separately, Iraq and neighboring Jordan have agreed to speed efforts to build a pipeline to export Iraqi oil through the Jordanian Red Sea port of Aqaba, according to Jordan’sPetra news agency.
The deal calls for an oil pipeline that would have a capacity to export 1 million barrels a day, according to the news agency and al-Maliki’s office.
Information for this article was contributed by Adam Schreck of The Associated Press.
Front Section, Pages 2 on 12/26/2012