Baghdad-Erbil disputes may impact new KRG oil deals

ERBIL, Kurdistan Region — Lingering economic disagreements between the Kurdistan Regional Government (KRG) and the Iraqi central government will likely impact any oil agreement that the KRG signs with international firms, according to an Iraqi lawmaker who is also a member of the oil and gas committee in the Iraqi parliament.

The KRG, under current circumstances pressured by the Iraqi government, is forced to make concessions when bargaining with foreign oil companies, signing unfavourable deals, Arez Abdulla told Rudaw.

“Due to the disputes between Erbil and Baghdad, the KRG sometimes goes along with conditions put forward by foreign oil firms, but if the issues are solved, the Kurdistan Region can much easier impose its conditions on the companies,” Abdulla told Rudaw Friday.

Baghdad has long threatened to blacklist any oil firm that operates in the Kurdistan Region without the approval of Iraq’s central government.

Iraq hit out at US oil giant Chevron Corp over its signed oil contract with Kurdistan, barring it from any oil agreements with the central government in 2012 in a move meant to deter other companies from dealing directly with the semi-autonomous northern region.

Baghdad holds that contracts signed by the KRG are illegal, and in 2011 US Exxon Mobil aroused its anger by striking a deal with the Region while also running a project at a supergiant oilfield in the south.

Russian oil giant Rosneft and the Kurdish government signed a series of documents on Friday that aim to expand cooperation between the two sides “in exploration and production of hydrocarbons, commerce and logistics,” according to a statement from Rosneft.

The KRG is hopeful that the agreement will "help the Kurdistan Region to further develop our oil and gas industry," the Ministry of Natural Resources stated in a press release.

This agreement may make Baghdad wary, according to Abdulla’s argument.

“If countries like Russia and the US have economic conditions in Kurdistan, they will indeed have a stronger presence in the Kurdistan Region and protect it,” he said.