The federal government in Baghdad and Iraq's semi-autonomous region of Kurdistan have reached a tentative agreement to resolve a dispute over payments to foreign companies that has shut down most crude oil exports from the region, Iraqi officials said.
The federal government in
Baghdad
and
Iraq
's
semi-autonomous region of
Kurdistan
have
reached a tentative agreement to resolve a dispute over payments to foreign
companies that has shut down most crude oil exports from the region, Iraqi
officials said.
The tentative deal was reached during a meeting earlier this week between
federal Prime Minister Nouri al-Maliki and the Kurdistan Regional Government
Premier Nechirvan Barzani, the officials said.
If the agreement comes into effect,
Kurdistan
could
resume oil exports of nearly 250,000 barrels a day via the Baghdad-controlled
export pipeline, potentially raising
Iraq
's oil
exports to nearly 2.9 million barrels a day, from around 2.55 million barrels a
day.
"The two sides have agreed to find a solution to payments to oil companies
in
Kurdistan
," Mr. Maliki's spokesman Ali al-Mawsawi said.
The deal comes after Kurdish negotiators concluded Tuesday their highest-level
visit to
Baghdad
in
nearly two years, embarking on talks that diplomats said could signal progress
toward ending a worsening feud between the Kurds and Arab Iraqis.
The talks were held against a backdrop of distrust between
Baghdad
and
the semi-autonomous region - which escalated over the weekend when Kurdish
military forces expanded southward into the northern region of
Kirkuk
amid
sectarian fighting there.
Tensions between the sides, which have simmered since
Iraq
's
reorganization following the 2003 U.S.-led invasion, plumbed a low in March,
when Kurdish politicians walked out of parliament, formally withdrawing from
Iraqi politics in
Baghdad
.
Baghdad
and
Erbil
, the
Kurdish capital, have been at loggerheads over scores of oil contracts that the
KRG signed with international oil companies.
Baghdad
says
these deals are invalid because they haven't been approved by the central
government, while the Kurds argue that they are in line with the new
constitution.
In December, the KRG suspended crude oil exports through the Baghdad-controlled
pipeline, principally over the issue of the lack of payments of oil export
revenues collected by
Baghdad
, owed
to firms operating in
Kurdistan
. There was a separate dispute
over production in November, with the Kurds unable to reach the export level of
250,000 barrels a day, as agreed with
Baghdad
.
In March, Kurdish parliamentarians and cabinet ministers walked out after
Iraq's parliament passed a budget that KRG lawmakers said didn't adequately
compensate them for some 4 trillion Iraqi dinars ($3.5 billion) in payments to
oil companies that operate in the Kurdish semi-autonomous region. The budget
allocated only $650 million to the firms.
The Patriotic Union of Kurdistan, or PUK, which with Kurdistan Democratic Party
form the strong Kurdish alliance in the Iraqi federal government and
parliament, said Thursday on its website that the two sides agreed to amend the
2013 budget to include payment for companies producing oil in
Kurdistan
.
Following the new agreement this week, "perhaps the central government
will not pay that entire amount, but they may reach a compromise," Ali
Hussein Bellu, an advisor to the Kurdish oil ministry told Dow Jones Newswires.
Mr. Bellu said he thinks that payment could be made when the government and
parliament discuss an additional budget for 2013, which usually happens in June.
Among other issues agreed by the two sides is the acceleration of the process
to enact a long-awaited draft oil and gas law.
"They have agreed to set up a joint committee to end the dispute on the
oil and gas law, based on the version of the draft law reached agreed on in
2007," the PUK said.
The proposed hydrocarbon law, which would govern contracts and regulation in
Iraq
, has
idled in the Iraqi parliament since 2008 because of differences between the
various political blocks, particularly the Kurds, over its provisions.
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