June 16, 2014 / 5:18 PM / 5 years ago

After Kirkuk, Kurds want quarter of Iraq oil revenue

ARBIL (Reuters) - 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.

Members of the Kurdish security forces take part in an intensive security deployment on the outskirts of Kirkuk June 12, 2014. REUTERS/Ako Rasheed

The Kurdistan Regional Government believes its share of total Iraqi oil sales should be as high as25 percent, the KRG’s official spokesman said on Monday.

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) ledassault last week allowed the Peshmerga forces of KRG to seizecontrol of long-disputed Kirkuk and its oil reserves.

If the autonomous region holds onto Kirkuk, revenues fromits major oil fields could far surpass any budget offer fromBaghdad, boosting its any ambition of succeeding as afully independent state.

Safeen Dizayee, the former foreign affairs and educationminister for the KRG and the autonomous government’s officialspokesman, said that while Arbil was supposed to receive 17percent of Iraqi oil revenues under current agreements, thetotal figure should be raised - based on its growing populationand rising oil output.

“The figure should be far higher and indeed when thecensuses are conducted we believe it could average 25 percent,”Dizayee said from his office at the Council of Ministers inthe region’s capital, Arbil.

“The 17 percent was just an estimate that was used. But evennow we don’t receive that.”

While Dizayee said the KRG continued to pursue a legalsolution to the status of Kirkuk with Baghdad, he acknowledgedthat his government was arguably in its strongest position everto secure the city many Kurds consider their historical capital.

“We have been very patient. This has been an issue since theearly 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 positionand impose it.”

But he said that an atmosphere of mistrust permeated relations with Baghdad, and that the federalgovernment’s refusal to hand over the KRG’s share of the budgetsince January was driving the two further apart.

“The fact is there has been a deliberate effort tomarginalize, sideline and ignore these efforts,” Dizayee said,adding that budget cuts from Baghdad were behind the KRG’sdecision to pursue independent oil sales outside the federalgovernment’s control.

INDEPENDENT OIL SALES

On Monday Turkish Energy Minister Taner Yildiz said a thirdtanker was set to load a cargo of Kurdish crude oil from theMediterranean port of Ceyhan on June 22, despite fierce protestsfrom the government in Baghdad who have tried to block thesales.

“The flow of oil is continuing and we will continue to sendit out and export it,” Dizayee said, adding that around 120,000barrels of crude was flowing on a new pipeline toCeyhan each day. The KRG wants independent sales to rise evenhigher.

“In order to cover the needs of the Kurdistan region or tocounter the 17 pct of the budget that should come from Baghdadbut that has been cut for the last six months we need at least400,000 barrels per day to be exported to meet that budget.”

That may be difficult for the KRG to achieve, however, dueto 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 Islamicmilitants in the region, who have targeted repair men trying tofix sections of the line that passes through territory outsideKRG control.

“For the last three months under normal – well almost normal– security conditions to repair the pipeline it hasn’t beensuccessful,” Dizayee said, when asked if the line would beprepared before the end of this year.

“It all depends to what extent the pipeline runs throughareas controlled be these (ISIL) elements. It wouldn’t be easyto predict.”

Editing by William Hardy

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