Monday, May 10, 2010

Iraq ends oil row with Kurdistan - Mr Al Shahristani

AFP cited Mr Hussein al Shahristani oil minister of Iraq as saying that an oil dispute between Iraq and the autonomous northern region of Kurdistan has been resolved.

Mr Al Shahristani said that "We reached an agreement with the Kurds that all revenues will be handed over to SOMO and the Iraqi government will be responsible for paying the extraction expenses in Kurdistan.”

Iraqi Kurdistan halted oil exports in October last year due to a payment dispute with Baghdad. The 2 sides previously clashed over how oil revenues should be distributed and Kurdish authorities had said they would not resume crude exports until Baghdad paid the foreign energy companies which are pumping the oil.

The central government had repeatedly said that it was opposed to the Kurds signing their own contracts, a position which Kurdish officials disregarded by making dozens of agreements with foreign firms. With an estimated 115 billion barrels, Iraq has the world's third largest proven oil reserves behind only Saudi Arabia and Iran. Its oil revenues account for around 85% of government income.

Since November, Baghdad has signed contracts with foreign firms to develop 10 oil fields around the country, with the aim of raising its output, currently at 2.4 million barrels per day to between 10 million barrels per day and 12 million barrels per day.

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