NOV. 13, 2014
BAGHDAD — Iraq’s central government and the autonomous region of Kurdistan reached an interim agreement on Thursday over oil exports and budget payments, at least temporarily easing a bitter dispute that has threatened the government’s stability.
The standoff began earlier this year when Kurdish officials angered Baghdad by exporting oil produced in their region directly to Turkey and not through the Iraqi Oil Ministry.
The government in Baghdad called the move unconstitutional and suspected that the Kurds were trying to use oil to advance a bid for independence. So the central government stopped sending to Kurdistan the 17 percent of the national budget allotted to the regional government.
Under the agreement signed Thursday, the central government will pay $500 million to the Kurdistan Regional Government, or K.R.G., from the national budget while the Kurds will let the Iraqi government sell 150,000 barrels per day of the oil exported by the Kurds.
Although the agreement put in place no long-term solutions, some hailed it as an important step.
“Hopefully this will be the starting point for addressing all the outstanding issues between Baghdad and the K.R.G.,” said Hoshyar Zebari, a Kurd and Iraq’s finance minister.
He said that resolving the disputes between the Kurdish government and Baghdad had taken on a greater urgency because the country was facing an economic crisis caused in part by the recent drop in the price of oil, the basis of Iraq’s economy. This in turn could undermine efforts to fight the Islamic State, the jihadist organization that has seized about one-third of Iraqi territory.
Others noted the limits of the interim agreement.
The amount of oil given to the Iraqi government to sell is at most half of what the Kurds export, said Kirk Sowell, a political risk analyst who publishes the Inside Iraqi Politics newsletter. And $500 million is only about half of what Kurdistan is meant to receive monthly from the central government.
The interim agreement did not even touch on larger, thornier issues, including whether Baghdad will continue to allow the Kurds to export their own oil and who will control the rich Kirkuk oil field in northern Iraq. The field came under full Kurdish control this summer after Iraqi government troops fled the Islamic State’s advance into the area.
Under the agreement, the prime minister of the Kurdish region, Nijervan Barzani, will travel to Baghdad within three days to meet with the central government to try to resolve the outstanding issues.
“This signifies pretty significant progress,” said David Goldwyn, a senior State Department energy official in the first Obama administration, noting that both sides had made concessions.
“They have crossed the Rubicon here on the K.R.G.’s right to export oil,” he said, “and they have foreshadowed the mechanism on how the K.R.G. will meet its obligation to the central Iraqi budget going forward.”
original source: http://www.nytimes.com/2014/11/14/world/middleeast/iraq-and-kurds-reach-deal-on-oil-exports-and-budget-payments.html