Iraq’s federal government is yet to reach a deal on oil exports with the semi-autonomous Kurdish region, the country’s Oil Minister has said.
Abdul-Mahdi in an interview to Reuters reiterated Baghdad’s opposition to Erbil selling its oil directly instead of delivering it to Iraq’s state oil marketing firm SOMO.
“We are still in a standstill. We are waiting for real discussions with our brothers in Kurdistan,” he said.
The Kurdistan Regional Government began bypassing Baghdad and exporting oil directly in 2014, following a dispute with the federal government about its share of the budget. It is currently exporting more than 500,000 barrels per day (bpd).
“If they deliver oil, they will have the 17%, if they don’t they will not have the 17%,” he said, referring to the portion of the federal budget allocated to the Kurdish authority in exchange for its oil.
He also said that Baghdad’s discussions with international oil companies operating in the south over revising the terms of their service agreements were heading in a good direction.
“We received some reduction in costs from the IOCs. We are still discussing. The IOCs presented some suggestions. We are nearer to each other than before,” he said.
“We have to put some incentives there for the IOCs but we also want them to bear responsibilities when the price is down and also we both be responsible on reducing the cost.”
