Baghdad’s Relation with Erbil: Conflicts and Oil Agreements

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Iraq's Minister of Oil Adil Abdel-Mahdi (C) speaks to the media as he visits Habbaze Oil well which was under control of the Islamic State in Iraq and the Syria (ISIS) for a while, in Kirkuk on February 2, 2015. Anadolu Agency/Ali Mukarrem Garip

By: Shaida al-Amin

Published Friday, February 6, 2015

Oil is one of the primary issues in Iraq today, and a main factor in driving its political process. From the southern provinces all the way to the Kurdish region’s border with Turkey, oil is one of the most contentious issue facing the country, which has become even convoluted because of foreign interests.

Erbil — The Kurdish region’s oil supply is a major point of contention in Iraq as it brings up questions of wealth distribution and foreign exports. The matter is further complicated by the ambiguous relationship between the institutions of the Iraqi state, particularly the relationship between the central government in Baghdad and the regional government of Iraqi Kurdistan.

The current Iraqi government headed by Haider al-Abadi is counting on an “interim” oil agreement reached last November, yet the agreement rearranged the relationship with Erbil in a manner that is still unclear and raises a number of problems.

Under this agreement, the oil fields in Kurdistan will export 250,000 barrels per day through the Iraqi oil marketing company (SOMO), while 300,000 additional barrels will be exported from the Kirkuk region through a pipeline that runs through Kurdistan. Iraqi Oil Minister Adel Abdel Mahdi explained at an earlier time that the agreement was reached quickly in order for Baghdad to prepare a budget for 2015. The minister pointed out that the Kurdistan region can continue to export more than the 250,000-barrels-a-day. At the same time, the legal action undertaken by Baghdad against the authorities in Erbil regarding oil exports will also continue.

The established oil agreement did not address the issue in a conclusive manner, at a time when other sensitive problems, such as disputed territories, remain unresolved.

The territorial expansion by the Islamic State in Iraq and Syria (ISIS) last summer served to further muddy the waters between the two sides, from Diala in the east, through the Kirkuk province, all the way to Nineveh in the west, along the border with Syria.

The Iraqi parliament voted last week on the 2015 budget. One of the results of this vote was to end the so-called “economic blockade” imposed on Kurdistan by the former Iraqi government — which has been in place for about a year and in turn caused a financial crisis in the Kurdish region — despite its on-going oil exports from the Turkish Port of Jihan.

In an interview with Al-Akhbar, Ibrahim Bahr al-Ulum, a member of the oil and energy committee in the Iraqi parliament, said: “The budget was approved and passed while we (currently) await its ratification by the Iraqi presidency as a first stage.”

“As such, we await the parties’ commitment to what was agreed upon in terms of exporting the amount of oil determined in the budget,” he added.

Regarding obstacles facing the implementation of the oil agreement between Baghdad and Erbil, Bahr al-Ulum stressed, “There are supposed to be a technical committees, whose job is to follow up on things, particularly in terms of the production and export amounts allocated in the budget. These committees will begin their work in the near future.”

Lack of legislation

Failure to legislate a number of laws in the period that followed the fall of the previous regime in 2003 exacerbated the disagreements between Baghdad and Erbil. The absence of a special law on oil and gas played a major role in inflaming these disagreements. Such a law would ensure a fair distribution of wealth between all the regions of Iraq, but it never came into fruition.

In an interview with Al-Akhbar, the prime minister’s spokesperson, Saad al-Hadithi, said, “There are many problems and contentious issues between the two sides (Baghdad and Erbil) that have accumulated over many years.”

He believes the reason for this stems from “the failure to legislate a number of laws.” Hadithi, however, acknowledged, “There is an encouraging atmosphere now that we will overcome this period of accusations and counter accusations. The latest oil deal with the government of Kurdistan is considered a good start but is not a solution for all our problems. It is a temporary solution and not a radical solution.”

“This solution needs to be developed and a permanent mechanism must be created,” he added.

Hadithi talked about an upcoming visit to Baghdad by a high-level delegation from the Kurdistan region. “A delegation from the government of Kurdistan headed by the region’s prime minister, Nechirvan Barzani, is going to visit Baghdad soon to continue discussions of contentious issues and develop the recent oil agreement in addition to the security challenges facing the federal and regional governments.” He argued that a visit like this might “contribute in bringing viewpoints closer in the search for solutions to these crises and reaching certain agreements,” he said.

For his part, deputy head of the energy and natural resources committee in the parliament of the Kurdistan region, Delshad Shaaban, told Al-Akhbar, “At present, there are not problems between Erbil and Baghdad and the oil agreement between the two sides became legal based on the federal budget for 2015. Both sides have an obligation to implement it.”

Shaaban added, “There were technical problems in the oilfields of Kirkuk, such as the burning of the Khabaz oilfield, some pipelines require maintenance and the oil-discharge pumps in the region should be replaced because they can not export more than 450,000 barrels a day. The two sides reached an agreement whereby the federal oil ministry and the regional government will work together to address these problems and steps are moving in the right direction. Erbil is committed to pumping about 200 million barrels of oil to Baghdad this year.”

He pointed out that “in the coming period, there is going to be increased mutual visits between the regional and federal governments to discuss a number of outstanding issues such as Article 140 about the disputed areas, how to deal with the oil from the Kurdistan region and the financial dues between the two sides.”

Deputy Prime Minister Rowsch Nuri Shaways said in a TV interview on Wednesday that passing the budget in its current form means not only commitment to the recent oil agreement between Baghdad and Erbil but a solution to a number of problems including the salaries of the Peshmerga forces. He argued that the relationship between Baghdad and Erbil is not at a standstill, and is moving in the right direction.


The National Guard: A new controversy
The relationship between Erbil and Baghdad underwent noticeable changes since Abadi became prime minister of Iraq in August 2014. He adopted a consensual attitude in dealing with the Kurdistan region unlike his predecessor and current Vice President Nouri al-Maliki, who insisted on a number of political and legal principles in the relationship with Erbil.

However, the national guard draft law passed by the central government in its last session early this week became a new point of contention between the two sides. Erbil opposes the creation of the national guard to assert its authority not only in its territory, but also in disputed territories.

In a TV interview, Shaways said that the Kurdistan Alliance supports creating national guard forces in all the areas of Iraq in accordance with a law that is agreed to and voted on. He went on to say that “there is no need” to create this force in Kurdistan because the region already has the Peshmerga. He added: “We do not oppose creating the national guard in Kirkuk. However, any steps there must be taken in agreement with the Kurdish forces to avoid problems and complications and because of the specific nature of the province.”

However, Jabbar Yawar, the secretary general of the Peshmerga ministry in the Kurdistan government, said on Wednesday, “Creating the national guard does not include Kurdistan because the region has its own forces according to the Iraqi constitution.”

In addition, “the administration of the Kirkuk province rejected its formation in the province.”

(Al-Akhbar)

This article is an edited translation from the Arabic Edition.

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