Kurds halt oil exports in payment row

The move by Kurdistan is the latest in a long-running row between Baghdad and Kurdish authorities.

Baghdad: Iraq`s Kurdish region halted oil
exports on Sunday after Baghdad`s top energy official warned it to
reconsider before following through on the threat over the
government`s non-payment of funds.

The move by Kurdistan is the latest in a long-running row
between Baghdad and Kurdish authorities in Arbil, who have
have squabbled over payments, revenue-sharing and the central
government`s refusal to recognise deals Kurdish officials have
signed with foreign energy firms.

Kurdistan said a week ago that it had been exporting
50,000 barrels of oil, and threatened to stop exports entirely
if Iraq did not hand over USD 1.5 billion Arbil said was owed
to foreign oil companies working in the region. Today,
Kurdistan followed through.

"After consultation with the producing companies, the
ministry (of natural resources) has reluctantly decided to
halt exports until further notice," the Kurdistan regional
government said in a statement on its website.

"There have been no payments for 10 months, nor any
indication from federal authorities that payments are

The statement said exports would be diverted to the local
market for processing and refining.

Before the Kurdish statement was released, the national
government`s deputy prime minister for energy affairs warned
Arbil to consider its threats and get "their act together."

"I would advise them, before they make any threat, to
consider how much oil (revenue) they are getting from other
parts of the country, which is much more than the oil that is
being produced there," Hussein al-Shahristani said in an
interview with AFP in his office in Baghdad`s heavily
fortified Green Zone.

Shahristani, a former oil minister, noted that Kurdistan
was allocated 17 per cent of Iraq`s federal budget, but said
it provided a smaller proportion of Iraqi oil exports.

He said the region was also not living up to its promises
on crude output.

"This is in breach of their commitment in the 2012 budget:
the Kurdish region is required to hand over 175,000 barrels
per day (bpd). Otherwise... they will bear the consequences if
that level is not met, and there should be a financial
compensation to the ministry of finance," he said.


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