Kirkuk receives new 'petrodollar' payment from KRG for exported oil

Iraq, August 9, 2016

KIRKUK, Kurdistan Region--

Head of the provincial council in Kirkuk told Rudaw Sunday the city received new payments for exported oil from the Kurdistan Regional Government (KRG) bringing up the total amount paid to Kirkuk to $50 million since December last year.

The so-called petrodollar money is paid to Kirkuk city for every exported barrel of oil from the two main fields in the province, Bay Hasan and Havana. Under terms of the compensation system, Kirkuk should receive 2 dollars for each exported barrel.

"The Iraqi government paid the petrodollar money until June 25, 2015, but after the new deal between Baghdad and Erbil to export Kirkuk's oil through Kurdistan Region, the KRG has the obligation to pay the money," Rebwar Talabani, Head of provincial council in Kirkuk said.

City officials have in the past said the disputed city is owed nearly $1 billion in compensation by Iraqi and Kurdish governments for exported oil since 2013.

A tentative agreement in December 2014 which led to the formation of Iraq’s new cabinet, gave KRG rights to partly export oil from Kirkuk province which is currently under Peshmarga control.

Also Iraq’s Northern Oil Company (NOC) exports oil from the province using KRG owned pipeline to Turkey. Iraq’s own northern pipeline was seized and damaged by militants during the ISIS offensive.

Kirkuk holds some 10 percent of Iraq’s total oil reserves estimated at 140 billion barrels.

Officials say oil production in Kirkuk has grown to an estimated 450.000 bpd with 360.000 of it exported to the Turkish Ceyhan port by both Erbil and Baghdad governments.

Iraq’s army abandoned the city in June 2014 in the aftermath of ISIS offensive across northern parts of the country.

Peshmarga forces entered Kirkuk province later the same month and have remained there since.