A view of the oil facility at the Baba Gurgur oil field in the Arafa district of Kirkuk (file). Kurdistan, after strengthened by the seizure of the oil city of Kirkuk, wants a greater share of Iraq’s oil revenue.
A bolder Kurdistan, a bulwark against ISIL forces and strengthened by the seizure of the oil city of Kirkuk, wants a greater share of Iraq’s oil revenue.
The Kurdistan Regional Government believes its share of total Iraqi oil sales should be as high as 25%, the KRG’s official spokesman said yesterday. The Kurdish position has arguably never been stronger.
Baghdad’s military retreat from the north under the Islamic State of Iraq and the Levant (ISIL) led assault last week allowed the Peshmerga forces of KRG to seize control of long-disputed Kirkuk and its oil reserves.
If the autonomous region holds onto Kirkuk, revenues from its major oil fields could far surpass any budget offer from Baghdad, boosting its any ambition of succeeding as a fully independent state.
Safeen Dizayee, the former foreign affairs and education minister for the KRG and the autonomous government’s official spokesman, said that while Arbil was supposed to receive 17% of Iraqi oil revenues under current agreements, the total figure should be raised - based on its growing population and rising oil output.
“The figure should be far higher and indeed when the censuses are conducted we believe it could average 25%,” Dizayee said from his office at the Council of Ministers in the region’s capital, Arbil.
“The 17% was just an estimate that was used. But even now we don’t receive that.” While Dizayee said the KRG continued to pursue a legal solution to the status of Kirkuk with Baghdad, he acknowledged that his government was arguably in its strongest position ever to secure the city many Kurds consider their historical capital.
“We have been very patient. This has been an issue since the early 1960s, but obviously now we have a stronger position,” Dizayee said.
“We have not ever, even in 2003 when we had the opportunity, tried to take control of Kirkuk and to make a de facto position and impose it.” But he said that an atmosphere of mistrust permeated relations with Baghdad, and that the federal government’s refusal to hand over the KRG’s share of the budget since January was driving the two further apart.
“The fact is there has been a deliberate effort to marginalise, sideline and ignore these efforts,” Dizayee said, adding that budget cuts from Baghdad were behind the KRG’s decision to pursue independent oil sales outside the federal government’s control.
Yesterday Turkish Energy Minister Taner Yildiz said a third tanker was set to load a cargo of Kurdish crude oil from the Mediterranean port of Ceyhan on June 22, despite fierce protests from the government in Baghdad who have tried to block the sales.
“The flow of oil is continuing and we will continue to send it out and export it,” Dizayee said, adding that around 120,000 barrels of crude was flowing on a new pipeline to Ceyhan each day. The KRG wants independent sales to rise even higher.
“In order to cover the needs of the Kurdistan region or to counter the 17% of the budget that should come from Baghdad but that has been cut for the last six months we need at least 400,000 barrels per day to be exported to meet that budget.”
That may be difficult for the KRG to achieve, however, due to a lack of suitable export infrastructure.
The 600,000 bpd Kirkuk pipeline, which accounted for the bulk of Iraq’s northern crude oil exports, has been offline since March following insurgent attacks.
Attempts to repair it have been thwarted by militants in the region, who have targeted repair men trying to fix sections of the line that passes through territory outside KRG control.
“For the last three months under normal - well almost normal - security conditions to repair the pipeline it hasn’t been successful,” Dizayee said, when asked if the line would be prepared before the end of this year.
“It all depends to what extent the pipeline runs through areas controlled be these (ISIL) elements.
It wouldn’t be easy to predict.”
Iraq tightens oilfield security in south
Iraq has tightened security and deployed extra troops around oil infrastructure and oilfields to help protect its vital energy industry from insurgents who have gained ground over the past week, a senior Iraqi security official said.
Brigadier Moussa Abdul-Hassan, chief of the South Oil Police, said additional troops have been deployed around oilfields, energy facilities, drilling locations and oil companies’ headquarters. Militants from Iraq and the Levant have routed Baghdad’s army and seized much of the north half of the country in the past week, threatening to break up Iraq and unleash all-out sectarian warfare.
“We have doubled security measures to keep oilfield operations and companies 100% safe. Now we have more than 100,000 oil policemen on ground on high alert, ready to protect energy facilities in the south,” Hassan told Reuters.
“We formed a crisis cell to closely monitor the security of foreign oil companies and we assured companies ... that their security is our top priority.”
Iraq looks to its massive oil resources for its future stability and prosperity, but still confronts a resilient Sunni Islamist insurgency now pushing southward towards Baghdad.
Iraq’s south, where the majority of the oilfields being developed by foreign firms are located, has been relatively safe and stable for the past two years.
“The checkpoints and protection posts were almost doubled and oil police members have been equipped with more powerful weapons, including rocket-propelled grenades and rifles,” Hassan said.
Basra, the main city in the far south at the edge of the Gulf, has enormous strategic importance as the hub for oil exports accounting for over 95% of government revenue.
Hassan denied rumours that foreign oil workers were being evacuated from Basra and said work is going on smoothly at oilfields around the city.
Officials from the state-run South Oil Co (SOC) also said operations in the southern oilfields are normal and none of the foreign companies have informed them of any evacuation plans.
