Tuesday, 10 July 2012, 07:26 GMT
Baghdad cuts Kurdistan's fuel share

Kurdish, Iraqi and Kar Group flags inside the Erbil Refinery plant in Erbil./GLOBE PHOTO/Safin Hamid

The Kurdish Globe

Former head of the Iraqi Oil and Gas Committee says the fuel cut is a measure used frequently to punish the Kurds

The Director of Erbil's Fuel Distribution announced that the fuel the province previously received from the central government has been completely cut, and argued that the reason is "political."

The spokesperson of the Iraqi Oil Ministry, however, refuted this and in turn argued that Kurdistan does not send its produced oil share to Baghdad.

Kurdistan Region Prime Minister Nechirvan Barzani announced in a speech marking the 31st graduation ceremony of Salahaddin University in Erbil that Baghdad had reduced the Region's fuel share from its original 33 thousand barrels per day to 15 thousand barrels from May 21st 2012.

While condemning this action by the central government and describing it as illegal, PM Barzani vowed to export the Region's crude oil if it was forced to do so to fill the gap.

Barzani expressed his gratitude for the Kurdistan Regional Government's (KRG) efforts and policies over the past years, which saved the region from a disastrous scenario of severe fuel and power shortages.

Nuraddin Hamed, Director of Erbil's Fuel Distribution, reiterated the Prime Minister's statement and told the Globe that "Baghdad had started reducing the fuel share of the Erbil Province until it was completely cut recently."

"Previously Erbil's share of fuel from Baghdad was 1,150,000 liters of gas per day, 1 million liters of diesel and 350-700 thousand liters of kerosene depending on season," explained Hamed.

While claiming that the reason for such a decision by the central government was politically motivated and related to the political crisis in the country and the state of Erbil-Baghdad relations that have deteriorated in recent months, Hamed argued that if this policy continues, it will result in a serious fuel problem.

"After the fuel cut, the KRG has been able to significantly compensate for this amount of fuel lost," explained Hamed. "We are getting gas from abroad and the Region provides kerosene and natural gas."

Dr. Ali Balo, the former head of the Oil and Gas Committee of the Iraqi Parliament, said that Baghdad has done this several times in the past by "using it as a political pressure card."

Balo described this initiative as a negative one for the political and economic situation in the country and especially its impact on delaying projects and services.

In an official statement by the Iraqi Oil Ministry, dated June 30th, the ministry denies the claims that they have cut or reduced Kurdistan's fuel share.

"Kurdistan Region's officials claim 17% of refined fuel from the central and southern parts of Iraq, but they fail to share the oil they produce in the region with the central government," read the statement by the Oil Ministry.

Yousif Nuri Abdulla, Director of Duhok Province's fuel distribution, said that their share in kerosene has also declined significantly.

"Recently Duhok's kerosene share has been reduced from 500 thousand liters per day to 250 thousand liters," Abdulla told the Globe.

Jamal Ali, director of Sulaimaniya fuel distribution, on the other hand, said that they used to receive 1,230,000 liters of gas per day.

"We were receiving 790,000 liters from Kirkuk and 440,000 liters from Beiji, in addition to 800,000 liters of diesel from Beiji and 400,000 liters from Kirkuk," said Ali. "However, currently the Kirkuk share is cut and we are receiving that from Bazyan."

Ali also added that their share of 318,000 liters of kerosene has also been cut and now they are only receiving the special share they used to get from Bazyan due to Sulaimaniya's mountainous nature.

He also added that they needed fuel storage facilities and that they had already requested a gas storage utility with a capacity of 75 thousand barrels per day, in addition to a natural gas storage facility with 70 million liters capacity.

According to Ali, they have also requested diesel storage of 10 thousand tons as well as storage services in Rania, Halabja, Kalar, Chamchamal and Sharbazher with 30 million liters each.

Assim Jihaj, Oil Ministry spokesperson, said that his country and his ministry have not and will not cut or reduce region's fuel share as this is the right of the Kurdistan Region.

"The problem is that Kurdistan Region does not provide information about its oil production and refining volumes and is not willing to share them with the other provinces while the other provinces share 17% of their production with the region," explained Jihad. "Besides, Kurdistan is not ready since April to export the 175,000 barrels per day as mentioned in the budget."

Kurdistan Region's proved oil reserves are estimated at around 50 billion barrels in addition to more than 10 trillion cubic meters of natural gas.

Kurdistan Region's Minister of Natural Resources Ashti Hawrami announced during the energy conference held in Erbil on May 20th 2012 that his ministry plans to lay new independent pipelines from the Kurdistan Region to world markets through Turkey, meaning that oil exports from the KRG could rise above 2 million barrels per day by 2019.