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The Englishman

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  1. DAVOS, Switzerland, Jan 17 (Reuters) - A long-running dispute on oil revenue-sharing between Iraq's national government and the semi-autonomous Kurdistan region may be resolved within months with agreement on a hydrocarbons law, Iraqi Kurdish Prime Minister Masrour Barzani said on Tuesday.

    Speaking after talks in Baghdad last week with Iraqi Prime Minister Mohammed al-Sudani, Barzani said the federal government committed to freeze for now court actions it had taken for control of oil and gas revenues from the Kurdish region.

    The dispute between Erbil and Baghdad erupted last year after a February federal court ruling that deemed the legal foundations of the Kurdistan region’s oil and gas sector unconstitutional.

    Agreement on regular budget payments from Baghdad would help authorities in the Kurdish Regional Government resolve payment delays to international oil companies in the region, as well as easing a backlog in salary payments for KRG employees.

    "What we have agreed is that all those pressures on the KRG will be halted and stopped for the moment and we will wait until we have the hydrocarbon law," Barzani told Reuters on the sidelines of the World Economic Forum in Davos.

    Until that deal was reached, the two sides would cooperate in oilfield management, oil sales and revenue-sharing - which he said would eventually be formalised in the budget.

    Asked about the timing for agreement on the hydrocarbon law, Barzani said it should be within months. "We had a time frame of six months. I don’t know if that would be realistic ... but I'm hoping that we can do it as soon as possible."

    Under the Iraqi constitution, the KRG is entitled to a portion of the national budget. But the arrangement collapsed in 2014 when the Kurds seized control of Iraq's main northern oilfields in Kirkuk from Islamic State militants and began selling crude from there independently.

    In 2018, Iraqi forces retook disputed territories, including the oil city of Kirkuk. Baghdad resumed some budget payments but they have been sporadic, and the federal government has tried to bring KRG revenues under its control, including through local court rulings and threats of international arbitration.

    The standoff has affected the KRG's ability to pay international oil companies (IOCs) operating on its territory and to pay thousands of local employees.

    "We always made sure that all the IOCs and oil traders know that the KRG is very committed to paying whatever they owe to the companies," Barzani said.

    When it (sic) agreement was reached with Baghdad, the KRG would "expedite the payments and make sure we can close the gap ... that they have been tolerating so far." "

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  2. Iraq’s debt set to fall steeply in 2022: Fitch Ratings

    Iraq’s debt set to fall steeply in 2022: Fitch Ratings

    Al Magreb Street (Morocco Street) in Baghdad, Iraq.

    Baghdad (IraqiNews.com) – Iraq’s government debt is set to fall steeply as a share of GDP in 2022, bringing it to pre-Covid-19 pandemic levels, says Fitch Ratings. This is positive for the sovereign’s creditworthiness, but the decline may not be sustainable, as it partly reflects political tensions that have constrained public spending and reflect the high political risk captured in Iraq’s ‘B-’ rating.

    Fitch Ratings’ expects debt/GDP to drop as higher oil prices – which they estimate will average at USD105/barrel (bbl) in 2022 and USD85/bbl in 2023 – and production boost government revenue and nominal GDP. Their forecast fall in Iraq’s government debt/GDP ratio in 2022, to around 47% of GDP, from 66% in 2021, is the largest for any sovereign in the Middle East and north African region, bringing the country below the median for ‘B’ rated sovereigns.

    62d4bea85aa5f1658109608.jpg
    Iraq, the second largest producer in OPEC, sits on enormous oil reserves, and revenues from the sector feed 90 percent of the federal government budget.

    In Fitch Ratings’ January 2022 affirmation of Iraq’s rating, they stated that positive rating action could result from a sustained period of elevated oil prices, particularly if combined with higher oil production and exports, leading to a downward trend in government debt/GDP and larger foreign reserves. Nonetheless, there is still significant uncertainty about public finance trends and the oil price outlook.

    Iraq’s falling debt ratio also reflects its failure to form a government and pass a budget since its October 2021 elections. This constrained spending to 2021 levels until parliament passed an emergency funding bill on 6 June to allocate USD17 billion, or 7% of GDP, for food and energy subsidies and salaries. Subsidy programmes, which remain unreformed, were in danger of running out of money due to the rise in global commodity prices.

    Fitch Ratings forecast of a 17% of GDP fiscal surplus in 2022 assumes a 6% of GDP boost in spending, broadly consistent with the emergency funding. However, risks to their spending forecasts are on the upside, as any new budget is likely to entail higher spending in light of Iraq’s pressing social and economic development needs.

    This image has an empty alt attribute; its file name is The-Iraqi-Prime-Minister-Mustafa-Al-Kadhimi-and-other-officials-during-the-inauguration-of-Maysan-power-plant.-Photo-The-Prime-Minister-Office.jpeg
    Iraqi Prime Minister Mustafa Al-Kadhimi and other officials during the inauguration of Maysan Power Plant. Photo: Prime Minister Office

    Fitch Ratings still forecast some nominal reduction of debt in 2022 if a new budget passes, in particular of accumulated central bank claims on the government, which had risen to about 13% of GDP in 2021. However, accelerated spending could impair the sustainability of public debt reduction. This could track a similar path as in 2018, also following elections, when public spending was slow to accelerate after oil prices rose, leading debt to fall to a degree, but spending eventually rose strongly.

    It remains unclear whether an incoming government will execute reforms put forward in a whitepaper under the previous administration in October 2020, even if Prime Minister Al Kadhimi is re-appointed. Parliament took out proposals for income tax reform from the 2021 budget, while other reforms, such as the removal of fuel subsidies for electricity generation, were approved, but not implemented.

    62a645c3ae5a21655064003.jpg Iraq’s populist cleric Moqtada Sadr. Photo: AFP

    The political outlook remains volatile. The largest parliamentary faction, led by Shia cleric Muqtada al-Sadr with 73 of the 329 members, resigned collectively on 12 June, having failed to form a coalition excluding the rival Iran-backed Shia Coordination Framework. The reordering of forces in parliament may enable government formation. However, Sadr retains considerable influence outside parliament and the underlying tensions that have hobbled Iraq’s politics will persist, including over Iranian influence and Kurdish oil autonomy.

    Public grievances could boil over into broader social instability, as they did in 2019-2020, with protests ultimately leading to early elections. Iraq scores poorly across the World Bank’s governance indicators, reflecting insecurity and political instability, corruption, government ineffectiveness and weak institutions. Fitch Ratings expect persistently high levels of political risk and weak governance will continue to weigh on the sovereign rating.

    https://www.iraqinews.com/iraq/iraqs-debt-set-to-fall-steeply-in-2022-fitch-ratings/

  3. BARZANI GOES TO BAGHDAD: TROUBLE IN THE KURDISH OIL AND GAS SECTOR

    JULY 18, 2022
     
     
     
    iraqi oil field

    A recent Federal Supreme Court decision in Iraq has put a legal stake in the heart of Kurdistan’s oil and gas sector — the financial lifeline of the region. Only one man has the power to fix this. Masoud Barzani — the 75 year-old former president and de facto patriarch of the Kurdistan region — must go to Baghdad and cut a political deal. Only Kak Masoud has the gravitas, the relationships, the respect, and the political capital to make this happen. Should Masoud choose not to take this opportunity or — worse yet — should his health begin to fail him, it is difficult to see how the crisis in this critical sector will be resolved.

    The Kurdistan region of Iraq has had a bumpy history with its parent government in Baghdad. Though the Kurdish provinces have been de facto separated from Iraq since the end of the first Gulf War in 1991, the 2005 Iraqi Constitution established it as a semi-autonomous region. That document left a great deal of ambiguity as to exactly which rights and privileges would be accorded to the region, a lacuna that resonates to this day.

     

    The rocky relationship has been highlighted by continual fighting — usually rhetorical but occasionally literal — on issues such as the so-called “disputed territories,” most notably the oil-rich province of Kirkuk, relations between the Kurdish Peshmerga and the security forces of federal Iraq, budget sharing from the federal budget for the Kurdistan region and, most bitterly, the legal standing of its oil and gas sector.

    The disputes with Baghdad have also been deeply contoured by various international interests. The United States has been generally supportive of the Kurdistan Regional Government and especially the ruling Kurdish Democratic Party — though not to the point of independence, as painfully demonstrated in 2017 when federal Iraqi forces retook control of Kirkuk from the Kurdistan Regional Government’s Peshmerga forces that had assumed control as part of the fight against ISIS. Turkey has been deeply conflicted, as it has a historic suspicion of the federal arrangement of the Kurdish Regional Government but is also the largest benefactor of its oil and gas sector. In fact, Turkey exercises almost total control over the Kurdistan region’s oil and gas sector, as it owns the pipelines inside Turkey and the exporting port of Ceyhan, an important source of hard cash as the Turkish lira continues to collapse. Iran maintains deep ties with both the major Kurdish parties, but is deeply hostile to the Kurdish Democratic Party’s rumored ties with Israel — to the point of using missiles for emphasis. Finally, both China and Russia see the area as a possible point of expansion into the region. Russia owns much of the Kurdistan region’s internal pipeline and Chinese firms appear anxious to engage in projects in the region. Of course, international sanctions on Russia complicate their involvement.

    The Kurdistan regional oil sector was primarily built under Masoud’s nephew, former Prime Minister Nechrivan Barzani from 2012-2019 and pumps between 400-500 thousand barrels per day of oil. But the status of the Kurdish oil and gas sector is now complicated by two legal difficulties. The first — an arbitration challenge by Baghdad at the International Chamber of Commerce with Ankara about the legality of the Kurds putting oil into the international pipeline without approval from the Iraqi State Oil Marketing Organization — is still pending. But the second, a lawsuit brought in 2014 by the federal Government against the constitutionality of the region’s oil law, was finally decided by the Supreme Court in February of this year. Why the decision — pending for years — was made at this particular moment remains a point of argument and speculation. But the Supreme Court has declared the Kurdish oil law unconstitutional, mandating that the Kurdistan Regional Government turn over all oil produced to the federal government, giving Baghdad the right — though not the obligation — to invalidate contracts entered between Irbil and various oil and oil services companies.

    Legally, this decision turned on the interpretation of Articles 110 and 111 of the Iraqi constitution, which deal with ownership and control of the production and export of Iraq’s natural resources — most notably oil. Without getting too deep into a contested constitutional question (those who wish to dig further may read here), both sides have legitimate arguments. The Federal Government’s case rests on the clear mandate given in Article 110, while the Kurdish case rested on its interpretation of exceptions to the rule given in Article 111. In short, the constitution is very ambiguous on this matter, probably by design, and the court had to choose which article — and therefore which government — to favor in its decision.

    The decision also occurs in the shadow of the Kurdistan Regional Government’s ill-fated 2017 Independence referendum. In the wake of an overwhelming victory in the non-binding referendum, Baghdad used federal Iraqi forces to re-establish control over Kirkuk province — technically part of federal Iraq but disputed. The loss of this province made independence non-viable, particularly as Baghdad, with Turkish cooperation, demonstrated how quickly the KRG could be isolated.

    The court has since made a series of other decisions implementing the February ruling. Just days ago, four oil contracts signed by the Kurdistan Regional Government were quietly annulled. Further, many corporations are responding to the change in the legal status quo and numerous western firms — Baker Hughes, Schlumberger, and Halliburton prominently among them — have begun to disentangle themselves from Kurdish oil projects. Other national firms — most prominently Turkey’s Genel, but also Russian and Chinese firms — may use a different calculus, but for those firms that are from part of the “liberal world order,” Baghdad’s decision is the relevant legal framework. The exception here is Chevron, which continues to operate in the region. As a super-major, it may either be willing to ride out the legalities and continue to work in a gray market situation, or it may simpler be taking a slower, wait-and-see approach to decision making.

    Despite a countersuit by the Kurdistan Regional Government and supportive rulings in its own provincial courts, the consequences of the legal ruling by the Supreme Court are now beginning to multiply, threatening the long-term viability of the entirety of the Kurdish oil and gas sector. While Baghdad does not have the ability or desire to send police forces into the north to enforce its decision, it has no need to. As the pre-emptive actions of the oil services companies show, the combined threat of international legal action and “blacklisting” from the (much larger) oil sector of southern Iraq will quickly result in many, perhaps most, international firms departing the region. While the legal regime has not yet threatened the transporters and buyers of Iraqi Kurdish oil with legal action, there can be little doubt that will be coming soon. The actions of these firms also reflect pre-existing concerns that had already made an investment in the Kurdistan region of Iraq less attractive — including both a less stable security situation and serious issues with payment from the Kurdistan Regional Government.

    The Kurdistan Regional Government — especially the ruling Barzani-led Kurdish Democratic Party — and their Western supporters have reacted to this court decision by maintaining to all listeners that the decision is a political one, wrapped up in government formation, longer-term anti-Kurdistan region sentiments, and Iranian influence. Only the judges know what was in their hearts, but this charge — even if true — is irrelevant to the facts at hand. From an international standpoint, the decisions of the Supreme Court represent the final interpretation of the internationally recognized Iraqi constitution, which is why oil and gas firms are quickly falling in line.

    As a matter of legality, the death knell for the legitimacy of the Kurdish oil sector seems to be final. This does not mean that gray market export cannot continue, as Turkey seems to have no desire to sever this revenue source, and there are plenty of non-Western oil servicing companies that will be happy for the business. But moving to such gray market options removes much of the upside potential and further depresses revenues.

    However, legalities do not prevent either side from entering a political deal that rewrites the Iraqi oil and gas law. Now obviously, the legalities contour the art of the possible in a political deal. Let’s be clear — in the Baghdad vs. Irbil contest over the legality of Kurdish oil contracts and exports, Baghdad has won. But that does not mean an end to the political negotiation. Keeping the Kurdistan Regional Government relatively satisfied — and, for that matter, keeping the 400-500 thousand barrels per day of Kurdish oil on world markets — is in Baghdad’s interest. A political deal can yet be reached.

    The Kurds could send — and doubtless, have sent, though without fanfare — a lower level, more technocratic team to Baghdad to negotiate. But this approach is unlikely to produce any result, let alone the sort of result that offers real possibilities to the Kurdistan region. A technocratic team is simply not empowered to make binding decisions, and Baghdad knows that.

    The Kurds have one great but as yet untapped asset — the person of Masoud Barzani, the former president and de facto patriarch. Only Masoud can go to Baghdad and hope to truly achieve a favorable result, as whatever Masoud legitimates will be unconditionally accepted by the Kurdistan region of Iraq’s citizenry.

    It is difficult to overstate the gravitas and political capital that the eldest Barzani holds throughout all of Iraq. While Arab Iraqi leaders have had numerous confrontations with him over the years, he is still held in the highest respect. This point was made very powerfully to me once, when an Arab Iraqi friend of mine went to Irbil to see Masoud Barzani. When I saw pictures of the meeting, I asked my friend why he had paid such a public visit, during a politically sensitive period in which their sides were not aligned. My friend replied, “The man is a historical and important friend to me, and I am more confident in his patriotism than his Kurdishness.”

    This deep regard that Arab Iraq holds for Masoud Barzani is singular, at least since the death of his political counterpart, Jelal Talabani. No other living Iraqi Kurd has this kind of gravitas, or commands this much respect from his Arab counterparts.

    The legal decision against the Kurdistan Regional Government has put the Kurdistan Region of Iraq in a position of existential danger. But Masoud — and only Masoud — has an opportunity to go to Baghdad and cut a political deal. No other figure will be so welcome in Baghdad, and no other figure has the standing to make the decisions required to reach a compromise. And frankly, only Masoud himself could get a deal that would be acceptable to Masoud. Sending a lesser emissary is a guarantee of failure.

    In short, there is an opportunity here, once Baghdad forms a government, to cut a grand bargain. This grand bargain will inevitably involve compromise. While such a bargain may give the three Kurdish provinces an unequal share of revenues that the Arab provinces may find unfair, it will almost certainly involve a degree of entanglement with the Federal Oil Ministry that will make Irbil uncomfortable. It will also force a degree of transparency on the Kurdistan Regional Government’s oil policies that some interests may find awkward.

    “Only Nixon can go to China” metaphors are overused. But this instance may be a valid comparison. Only the author of the Kurdish independence referendum can go to Baghdad to salvage the best deal that can be had for the Kurdish oil project. As court decision after court decision begin to cascade against the Kurdistan Regional Government’s oil ministry, Barzani should make it clear that he wants to personally negotiate and then codify the inter-relationship between Baghdad and Irbil in the light of these decisions. That said, I do not believe Masoud has even been to Baghdad since the days when he sat on the Iraq Governing Council. His coming down from Irbil would be a major change in pattern — but it is from this that the gesture would draw its power. His absence from personal involvement “in the fray” for decades will highlight the seriousness of the moment in which he re-engages.

    Masoud Barzani has an opportunity to cement a legacy. It may not be the legacy of Kurdish independence that he dreamt of five years ago. But a legacy of securing a privileged place for the Kurdistan region inside a unified Iraq is not nothing. Kak Masoud can still be a hero to Iraq’s Kurds by cementing their long-term financial future. It is hard to see another such opportunity on the horizon. Former President Barzani should gather all his chips, all his political capital, all his personal markers and go to Baghdad at the height of his considerable power, to cut a deal.

    https://warontherocks.com/2022/07/barzani-goes-to-baghdad-trouble-in-the-kurdish-oil-and-gas-sector/?singlepage=1

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  4. Allawi: the government will address the oil crisis when the oil and gas law is approved.

    2021-07-04 20:03

    In a statement to CNBC Arabia, Allawi said that the highest electricity production reached 20,000 megawatts. Still, the sustainability of production is a challenge for the government due to the climate and gas supplies from Iran.

     

    Regarding the exit of foreign oil companies from Iraq, Allawi stressed that it is too early for these companies to withdraw since the Iraqi economy has great importance for them, noting that the government will address the challenges threatening the oil sector if the oil and gas law is approved.

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  5. 1624797766238.jpg
     

    The oil and gas law will be approved during the next parliamentary session, MP suggests

     

     2021-06-27 13:43
     

    Shafaq News/ Kurdistan Democratic Party MP Dana Muhammad suggested approving the oil and gas law during the next electoral parliamentary session, as it is "a solution to the oil disputes between the federal government and the Kurdistan Regional Government."

     

    Muhammad told Shafaq News Agency, "disrupting of the approval of the oil and gas law since 2007 until now is the result of differences between all political forces", noting, "the law was never included the parliament's agenda over the past years."

     

    He stressed the need to, "approve the oil and gas law during the next parliamentary session, due to its importance in resolving the oil disputes between Baghdad and Erbil, and determining the powers of each one of them."

     

    "Adopting the law will put the Iraqi parliament in permanent knowledge of the powers of the federal government and the regional government. The Kurds and the Kurdistan Democratic Party support the approval of the oil and gas law in a manner that suits the interest of the region and the federal government."

     

    The differences between the blocs and the parties over the past years have resulted in more than three formulations of the oil and gas law. The first draft was put in 2007 and was rejected after the Kurdistan Alliance's objection, while the second version was developed in 2010. Still, the National Alliance expressed objection to the law and withdrew from the voting session. The third is a proposed law drawn up by the Parliamentary Oil and Energy Committee in 2011, but various political parties also rejected it.

    https://shafaq.com/en/Iraq-News/The-oil-and-gas-law-will-be-approved-during-the-next-parliamentary-session-MP-suggests#

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  6. Just to add to the good news today.

     

    MARCH 31, 202110:29 PMUPDATED 26 MINUTES AGO

    Saudi Arabia, Iraq to continue cooperation to ensure stability of global oil markets: joint statement

    By Reuters Staff

    1 MIN READ

    CAIRO (Reuters) - Saudi Arabia and Iraq agreed on Wednesday to continue cooperation within OPEC and with full commitment to the requirements of the OPEC+ agreement, according to a joint statement carried by the Saudi state news agency (SPA).

    Saudi Arabia and Iraq agreed on “the need to continue cooperation and coordination of positions in the petroleum field, within the scope of work of the Organization of Petroleum Exporting Countries (OPEC) and the OPEC + agreement, with full commitment to the requirements of the agreement, the compensation mechanism, and all the decisions that have been agreed upon, to ensure the stability of the global oil markets,” SPA reported.

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  7. Shafaq News/ The Dinar/Dollar exchange rates surged in the Iraqi market.

     

    Shafaq News Agency correspondent said that Al-Kifah and al-Harithiya stock exchanges are trading the 100 US dollar at 145750 Iraqi dinars, compared to 145100 dinars on Thursday, earlier this week.

     

    Our correspondent added that today's selling and buying prices in the local markets rose to 146250 and 145250 dinars per 100 dollars.

     

    In Erbil, the capital of the Kurdistan Region, the dollar price also climbed, as the selling price reached 145,800 dinars, while the purchase price amounted to 145,500 dinars per 100 US dollars.

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  8. Kurdistan Region agrees to Baghdad's terms; awaits its response

    “We will remain here until we reach an agreement.” 

     Hiwa Shilani   December 14th 2020   23:12
          
    Qubad Talabani, Deputy Prime Minister of the Kurdistan Region. (Photo: Azhi Omer) Qubad Talabani, Deputy Prime Minister of the Kurdistan Region. (Photo: Azhi Omer)
     
     

    ERBIL (Kurdistan 24) – The head of the Kurdistan Regional Government’s (KRG) delegation to Baghdad, Qubad Talabani, announced on Monday that the Kurdish side is waiting for a response from Baghdad, after it agreed to the provisions of the "budget deficit" law that the Iraqi parliament approved—despite the absence of representatives from the Kurdistan Region.

    "We have been in Baghdad since last Wednesday in order to implement the budget deficit law, which was issued in the Iraqi parliament without the participation of the Kurdish political parties," Qubad Talabani, deputy head of the regional government, stated in a press conference.

    Last month, the Iraqi parliament approved a budget deficit law in the absence of representatives from the Kurdistan Region, who boycotted the session over disagreements about a clause in the new law that Kurdish lawmakers described as “unfair” in allocating the share of the autonomous region in the federal budget.

     

    "Despite our observations on this law, we came to Baghdad in order to implement this law, and we held many meetings with government officials and negotiated with official, party, and influential figures in Baghdad," Talabani explained in Monday’s press conference.

    The controversial law stipulates handing over the region's oil and non-oil revenues to the federal government. Talabani indicated that the regional government was ready to abide by this condition, as he added, "We are awaiting Baghdad's decision in this regard and how much the share of the Kurdistan Region will be in the budget, after we agree to the condition."

    "We have heard many words about the failure of negotiations with Baghdad,” Talabani said. But “we tell [people saying such things] that the negotiations have not failed. They are continuing, and we are here in Baghdad.”

    “We will remain here until we reach an agreement,” Talabani affirmed.

    “Any share that will be agreed upon for the region is not a gift to the people of Kurdistan,” he stated, “but rather their constitutional share from the general Iraqi budget. We do not expect others to give charity to us, but rather our rights."

    Talabani also noted that "the political atmosphere in Iraq at the present time is complicated, as we go towards elections, so there are pressures on the political parties.”

    He called on all sides "to have patience,” adding, “We are here in Baghdad to obtain the rights of the Kurdistan Region, especially the right of those with [government] salaries in the region, and I am confident that we will reach a positive result."

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  9. Iraqi minister proposes forming company to handle Kurdish oil operations

     

    The Iraqi oil minister has proposed forming a company to manage oil production and export operations in the semi-autonomous Kurdish region, state news agency INA reported on Tuesday

     
     
    Reuters , Tuesday 13 Oct 2020
     
     
    The Kurdistan Regional Government (KRG) and central government in Baghdad have been locked in a long-running dispute over oil and land rights in the northern Iraqi Kurdish region.

     

    Talks on oil issues between the government and authorities in the Iraqi Kurdish region had reached a "positive understanding", Oil Minister Ihsan Abdul Jabbar said, according to INA.

    The proposed state company's management would be technically and administratively linked to the Kurdish regional authorities and federal Oil Ministry, he said, adding that it would be similar to state-run firms in Iraq's crude producing provinces.

    An Oil Ministry official told Reuters talks between oil officials from Erbil and Baghdad had made progress but more time was needed to reach a final agreement.

    The semi-autonomous Kurdistan region of Iraq is still exporting oil without consulting the Iraqi federal government, the minister had said in September.

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    • OIL
    •  
    • 13 Oct 2020 | 07:04 UTC
    •  
    • Dubai

    Iraq's oil minister proposes creating Kurdish crude upstream, export company

    HIGHLIGHTS

    Firm would be technically and administratively linked to Erbil and Baghdad

    Erbil and Baghdad have positive understanding to resolve oil dispute

    Disagreement over oil policy complicates Iraq's OPEC+ compliance

     

    Dubai — Iraq's oil minister has proposed creating a company to manage upstream and export operations in the semi-autonomous Kurdish region as Erbil and Baghdad hammer out an agreement to resolve their oil dispute.

     

    The proposed company would be technically and administratively linked to the Kurdistan Regional Government and the federal oil ministry, Ihsan Ismaael told the state-owned Iraqi News Agency Oct. 13.

    There is a positive understanding between Erbil and Baghdad regarding the production and exports of Kurdish oil as part of ongoing negotiations over the region's oil policy.

  10. Baghdad announces ‘historic deal’ with KRG over Iraq’s Sinjar

    BY DAILY SABAH WITH AGENCIES

     ISTANBUL POLITICS 
    OCT 09, 2020 7:44 PM GMT+3
     
     

    The Iraqi government Friday announced that Baghdad had reached a “historic deal” with the Kurdistan Regional Government (KRG) over the governance and security of Sinjar, according to Prime Minister Mustafa al-Kadhimi’s spokesperson.

    Ahmed Mulla Talal said in a Twitter statement that Kadhimi had “sponsored a historic agreement which will bolster the federal authority in Sinjar as per the constitution in terms of governance and security.”

    The deal “ends the authority of intruding groups and paves the way for the reconstruction of the city and the full return of its people in coordination with the Kurdistan Regional Government,” he added.

    The KRG has previously called the presence of groups such as the PKK terrorist organization in Sinjar unacceptable and has urged the militants to leave the area.

    Sinjar falls within an area disputed between the central government in Baghdad and the KRG, based in Irbil, according to Article 140 of the Iraqi constitution.

     

     

    The announcement came following a meeting between representatives from both parties.

    "It's a good agreement, and we had a good meeting with the Iraqi prime minister in the presence of parties from the U.N. and Iraq," KRG Interior Minister Reber Ahmed told KRG-based news outlet Rudaw, adding that the agreement would help displaced families return to their homes.

    The PKK terrorist group managed to establish a foothold in Sinjar in mid-2014 on the pretext that it was protecting the local Yazidi community from Daesh.

    Since then, the PKK has reportedly established a new base in the area for its logistical and command-and-control activities.

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  11. 1598300923954.jpeg
     

    Kurdish PM: three months agreement with Baghdad

    •  
     2020-08-24 21:29

    Kurdish PM: three months agreement with Baghda

     

    Shafaq News / The Prime Minister of Kurdistan, Masrour Barzani announced today, Monday, that the government made a financial agreement with Baghdad for a period of three months.

     

    Barzani said in an interview with Kurdish media, that the agreement with the federal government is currently for a period of three months only, after that, a comprehensive agreement on the budget will be reached.”

     

     

    Regarding the disputed areas between Baghdad and Kurdistan, Barzani said that the dialogue is continuing to fill the security vacuums and confront ISIS while efforts are being made to implement Article 140 of the disputed areas.

     

     

    "It is the first time that a delegation from Kurdistan participates with the Iraqi delegation in the Washington, where dialogue took place about the internal Iraqi situation," he said.

     

     

    Masrour Barzani confirmed that he sent a letter to US Secretary of State Mike Pompeo included the the region's intention to continue dialogue with the federal government to reach solutions to all outstanding issues.

     

     

    The prime minister said, "We live in a region full of problems, and our most important one is the lack of unity, and many political parties seek to preserve the constitutional entity of the region, but unfortunately there are some parties that work otherwise."

     

     

    Regarding the Corona virus, Masrour Barzani asserted that "the region’s authorities were the first to take many measures to protect citizens, but unfortunately some parties are manipulating the lives and safety of citizens and turning it into a political issue."

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  12. US urges Baghdad to reach budget deal with KRG

    2 hours ago
     

    Share share

     

    US urges Baghdad to reach budget deal with KRG
    Iraq's Foreign Minister Fuad Hussein (left) speaks during a press conference with US Secretary of State Mike Pompeo at the State Department in Washington, DC on Aug. 19, 2020. (Photo: AFP/Mandel Ngan)
     

    WASHINGTON DC (Kurdistan 24) – Senior officials at both the State Department and the White House made clear that a US priority in the visit to Washington of Iraqi Prime Minister Mustafa al-Kadhimi is to promote improved relations between Baghdad and Erbil, and, above all, to see the two parties reach a budget agreement.

    “I urged Baghdad to clinch a budget deal with the Kurdistan Regional Government,” US Secretary of State Mike Pompeo said in a joint press briefing on Wednesday morning with Iraqi Foreign Minister, Dr. Fuad Hussein, a Kurd who was previously Chief of Staff to Masoud Barzani, long time president of the Kurdistan Region, until stepping down in 2017.

    Following a meeting between Pompeo and Kadhimi later that day, State Department Spokesperson, Morgan Ortagus, stated that Pompeo had stressed “the urgent need for a budget agreement with the Kurdistan Regional Government.”

    Similarly, a senior administration official speaking to journalists on Wednesday afternoon, explained in introductory remarks to journalists, that an important topic of discussion would be Iraq’s “relationship with the Kurdistan Regional Government (KRG) to ensure that that contract remains viable.”

    Kurdistan 24 subsequently asked, if he could be more specific, and he began his response by citing Iraq’s constitution—adopted in 2005, two years after the US-led overthrow of Saddam Hussein’s regime.

     

    US: Iraqi Constitution is Crucial

    “In the end, you know, the constitution is the basis and the contract between Iraq’s people and its government,” this senior administration official stated. “There are a number of provisions regarding the relationship between Baghdad and the Kurdistan Regional Government, and we’re keen to see those fulfilled.”

    “We understand they’re not easy,” he continued. “We are, and we have been willing and able to assist in the process to do that.”

    Iraq’s constitution is a very liberal document, guaranteeing the equality and rights of all citizens. It embodies concepts that are alien to Iraq’s long history of authoritarianism. In their disputes with Baghdad, Kurdish officials often appeal to the rights stipulated to the Kurdistan Region in the constitution.

     

    Thus, a publicly stated US determination to insist on adherence to the Iraqi constitution will certainly be welcome in Erbil.

    Under the Obama administration, Washington tended to defer to Baghdad on such matters, even as Iran’s influence in Iraq was growing. That was easier than standing up to Baghdad’s abuse of the Kurds, and it was consistent with the Obama administration’s desire to reach a broader understanding with Tehran.

    That policy essentially continued for the first year of the Trump administration, while Rex Tillerson was Secretary of State. Under Pompeo, it has been evolving, until it has reached this point: the Iraqi constitution—and its protections for Kurds and other minorities—must be respected.

    “Our most acute conversation point in this visit is to make sure that the resources available to the Baghdad central government also find their way to the KRG,” the senior administration official continued, as he responded to the question from Kurdistan 24.

    “So there is an agreed-upon distribution of resources, and the KRG is part of that equation,” even as “we understand that the budget crisis,” driven by the coronavirus pandemic and the drop in oil prices, “is significant,” he added.

    “Nonetheless, it is important, from our view, that Iraq continues to provide the support and assistance that the KRG needs, as it does to other regions within Iraq. So that is our primary concern,” he concluded, as he also noted that such funding was crucial for another administration priority: the return of refugees and displaced persons to their homes.

    On Saturday, just before the Iraqi delegation left for Washington, Kurdistan Region Prime Minister Masrour Barzani announced that a partial budget agreement had been reached between Baghdad and Erbil.

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  13. Chevron Pursues Exploration Deal in Iraq

    U.S. oil major could unveil pact with Baghdad on sidelines of White House visit

     
    Isabel Coles
    Aug. 17, 2020 11:16 am ET
     

     

    Chevron Corp. is in talks to invest in one of Iraq’s large oil fields, according to people familiar with the situation, providing a vote of confidence in the country’s energy industry despite years of instability and start-and-stop foreign investment.

    Chevron and the Iraqi government tentatively plan to sign a memorandum of understanding to develop one of Iraq’s large oil fields in the south of the country.

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  14. 1597651849202.jpg

    Al-Hakim to support Baghdad-Erbil agreement under on conditions

    •  
     2020-08-17 09:11
     

    Shafaq News / The coalition of "Iraqioon" led by Ammar al-Hakim announced its support for any agreement reached between the Kurdistan Regional Government and the federal government to resolve differences and outstanding issues.

     

    A statement issued by the leadership of Iraqioon said today, Monday, that it held a meeting headed by, Ammar al-Hakim, and discussed the topics of early elections, the visit of Prime Minister to Washington, unifying the media speech, in addition to discussing the relationship between Baghdad and Erbil.

     

    The statement added that the meeting confirmed the importance of preparing for just elections away from political money or weapons, in addition to completing the procedures related to the House of Representatives, such as the election law and the Federal Supreme Court role.

     

    With regard to Al-Kadhimi's visit to Washington, the meeting stressed the importance of opening up Iraq to everyone and establishing the best relations based on common interests, mutual relations, respecting the sovereignty of Iraq and refusing to make it a starting point or a pathway to threaten regional security or neighboring countries.

     

    Regarding the relationship between Baghdad and Erbil, the meeting affirmed their support for any agreement insuring the benefit of all Iraq components.

    The statement also declared that any dialogues between the federal government and the regional government should base on the Iraqi constitution.

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  15. KRG PM BARZANI ANNOUNCES 'PARTIAL RESTORATION' OF PAYMENTS FROM BAGHDAD AMOUNTING TO 320BN IQD

    Deal reached after call with Kadhimi
     

    9 Hours ago

     

    SULAIMANI — Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani announced in a late-night tweet on Sunday (August 16) that Iraq’s federal government has agreed to resume limited budget transfers four months after it cut payments in response to the KRG’s failure to live up to its obligations under the 2019 Federal Budget Law.

    “After a call with [Prime Minister Mustafa al-Kadhimi] today, I am pleased to announce that Baghdad has agreed to pay IQD 320bn [$268.2 million] monthly as a partial restoration of our share of the federal budget,” Barzani said in a tweet that included his personal initials.

    “We are in agreement on both parties’ constitutional rights and duties, and dialogue will continue,” he added.

    While far from resolving the KRG’s significant financial difficulties, it will likely be seen as a welcome development for the cash-strapped government, the Kurdistan Region’s investors, and its beleaguered public sector workforce.

    Under the terms of the 2019 Federal Budget Law, the Region is supposed to receive 12.67 percent of the budget, in return for transferring 250,000 barrels of crude oil per day to Iraq’s oil marketer for export. The KRG never sent any oil, but the federal government was nevertheless obligated to send money monthly to pay for public sector salaries under a provision of the law and did so for fifteen months.

    The timing of Baghdad’s decision to cut off budget transfers in April came at a time of acute economic pain for the Region, which was facing the collapse of global oil prices and the effects of the coronavirus pandemic, giving the federal government significant leverage to seek a comprehensive budget agreement that would resolve many of the long-running disputes that have plagued relations between the two capitals.

    During the spring, federal and KRG negotiators met several times, but have not held face-to-face talks since late-June, with a scheduled trip scrapped in July.

    Nevertheless, discussions continued, with control over the customs procedures at the Region’s crossings with Iran and Turkey taking on increased prominence amid Kadhimi’s push to reassert centralized state control over Iraq’s border points and reduce smuggling and revenue expropriation by political parties, tribes, and militias.

    Barzani did not reveal details of the agreement in his tweet or whether concessions were made related to the customs issue.

    For many in the Kurdistan Region, however, the news raises hopes that they will be paid this month.

    Since February, Erbil has only paid public servants twice: in May and in July, when it cut nearly a quarter of the take home pay of employees making more than 300,000 Iraqi dinars ($251) per month.

    The government is the Region’s most important employer, supplying the incomes of hundreds of thousands of people. Erbil’s failure to live up to its obligations has sparked several rounds of protests and labor strikes, in particular by doctors and traffic police.

    It is estimated that the KRG requires 894 billion Iraqi dinars ($749.3 million) to pay its public sector wage bill, about half of which, 452 billion dinars, had been supplied by Baghdad before April. The 320 Iraqi dinar figure is a significant reduction from that level, suggesting that much remains to be done before a comprehensive budget agreement can be reached between Erbil and Baghdad.

    Beyond what it owes to its people, the KRG also carries significant foreign and domestic debt and has delayed payments to international oil companies operating in the Kurdistan Region.

    The newly announced infusion is far from sufficient to pay the government’s full obligation, but the cash and the prospect of further talks will take some of the pressure off for now.

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  16. Iraq agrees to pay Kurdistan region share of federal budget

     

    Move seen as a positive step towards normalising relations between Baghdad and cash-strapped Eribl

     
      Iraq has agreed to resume monthly payments of its federal budget to the Kurdistan Regional Government in Erbil.

    The deal represents a positive step towards restoring relations between the central government and the autonomous Kurdish region, which held a vote for independence in 2018 that the central government swiftly crushed.

    The core of their outstanding issues has been Baghdad's halting of Erbil's share of the national budget.

    “I am pleased to announce that Baghdad has agreed to pay IQD 320 billion ($268m) monthly as a partial restoration of our share of the federal budget. We are in agreement on both parties’ constitutional rights and duties, and dialogue will continue,” Kurdish Prime Minister, Masrous Barzani, wrote on Twitter late Sunday.

     

    Baghdad’s halting of payments to the KRG heightened pressure on the already cash-strapped provincial government, which is struggling in the low oil price situation due to the outbreak of the coronavirus pandemic.

     

    The spread of the virus has pushed Iraq's economy to the brink of collapse, especially with renewed public anger and social unrest.

    Over 90 per cent of the country's budget depends on oil export, with the price of $56 per barrel. But oil revenues dropped dramatically due to the start of coronavirus and economies around the world, including Iraq, were hit badly.

    In addition, Iraq's economy had already been affected by mass anti-government protests over poor services and corruption that began last October.

    Since then the government has struggled to pay salaries and was forced to delay projects and is working to introduce unpopular financial reforms.

    Under the constitution, the Kurdish region is entitled to a share of the national budget. But that arrangement collapsed in 2014, when Iraq’s army fled the north in the face of an advance by ISIS.

    The Kurds seized control of Iraq’s main northern oil fields at Kirkuk from ISIS and began selling Kirkuk’s oil independently.

    In response, Baghdad stopped sending money to the KRG.

    Iraq’s Prime Minister Mustafa Al Kadhimi and Mr Barzani agreed to resolve any outstanding issues between the two sides under the constitution, KRG spokesperson Jotiar Adil said on Facebook.

    Previously, Baghdad has said that the Kurdish region conducts independent oil sales, although it has far less oil to sell without control of Kirkuk.

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    •  
    • 21 Jul 2020 | 10:05 UTC
    •  
    • Dubai

    Iraq's tussle with semi-autonomous Kurdish region seen complicating energy policy

    HIGHLIGHTS

    Kurdish political parties divided over oil talks with Baghdad

    Kurdish production remains opaque vs Baghdad

    OPEC+ compliance often blamed on lack of Kurdish support

     

    Dubai — Iraq's federal government has a complicated energy relationship with the Kurdish region that is unlikely to be resolved due to differences within the semi-autonomous entity itself and Baghdad's own struggle with OPEC+ compliance, according to analysts.

     

    While the 28-year old Kurdish region has its own parliament and government, differences between the two dominant parties -- the Patriotic Union of Kurdistan and the Kurdistan Democratic Party -- on how to deal with Baghdad over the oil portfolio is standing in the way of a lasting agreement. Kurdistan Regional Government officials often visit Baghdad to try to resolve the standoff over oil sales and revenue distribution, which has long been a stumbling block for the OPEC producer to have a unified energy policy.

     

    "There is a difference of opinion on how to approach Baghdad and what to demand and what to give away in terms of the negotiating stance," said Shwan Zulal, head of Carduchi Consulting.

    "KRG in one sense is not ready to deal with Baghdad on the issues because there is no solid position yet. That puts Baghdad in a very difficult position, because what they might tentatively agree on is not going to produce any firm results as there is no agreement in Kurdistan itself."

     

    OPEC+ cuts

     

    Baghdad, a laggard in adherence to OPEC+ cuts, often blames the Kurdish region and its opaque production data as hurdles in the way of its compliance.

    Unlike Baghdad, Erbil does not publish monthly figures for production and exports, which it markets itself and sells from oil production deals that are not recognized by the federal government. Baghdad markets its oil through the State Oil Marketing Organization.

    Oil minister Ihsan Ismaael has emphasized the need for a single oil policy in Iraq and is keen to have Kurdistan contribute to OPEC+ cuts.

    Although Iraq's compliance in June improved, it is not known how much the Kurdish contribution was, since SOMO does not break down production figures in its monthly data reports.

    Erbil's current negotiations with Baghdad include the marketing of oil, whether KRG should give its oil to SOMO, and the distribution of federal government revenue to the KRG to pay for salaries.

    However, Baghdad's compliance with OPEC+ is not just about Kurdish production, which may be just rhetoric, according to experts. Baghdad needs associated gas as a feedstock for its power stations and has already been rocked by protests due to electricity cuts.

    "Going forward, the challenge will be for Iraq to cut output to compensate for overproduction in May-June," said Ahmed Mehdi, research associate at the Oxford Institute for Energy Studies "This will be challenging as Iraq has to carefully manage output cuts by ensuring dry gas processing and extraction operations remain uninterrupted, particularly as peak seasonal power demand kicks in."

     

    Political struggle

     

    Whatever Iraq's OPEC policy may be, its tussle with Erbil over energy and revenue will continue, according to analysts.

    For example, Erbil does not have the ability to borrow internationally or tap into central bank reserves, unlike Baghdad.

    "The only thing they have is forward oil sales," said Ahmed Tabaqchali, a senior fellow at the Institute of Regional and International Studies in Kurdistan. "This is very expensive borrowing."

    Kurdish President Masrour Barzani said in a May 22 speech that the region has $27 billion in debt and raked in only $30 million in April from oil sales that went into government coffers.

    The Kurdish region pumped on average more than 468,400 b/d in 2019, according to a Deloitte audit. The net cash balance received by the KRG for sales and related activities was $4.515 billion last year.

    "It's a political power struggle apart from the control of finances," said Zulal. "In the long term, the KRG knows if they concede too much to Baghdad and oil prices go back to $60 or $70 they will be kicking themselves."

     

    Oil debt

     

    One sticking point is whether Baghdad will have to take on the KRG's oil debt if it were to take control of Erbil's oil.

    "How is this going to be brought under one umbrella and who is going to pay the operators [in the Kurdish region]?" said Zulal. "There is a huge amount of complexities around it and that's why a permanent fix of a magic bullet does not really exist."

    Some sweeteners may be thrown in to make a deal possible. Former oil minister Thamer al-Ghadhban discussed with a KRG delegation the possibility of using Kurdish gas to power stations in Iraq. Baghdad currently relies on Iranian gas and electricity imports and is under US pressure to wean itself of these supplies.

    "If you look at just oil then the government pretty much loses out no matter what it does if it pays the KRG share," said Tabaqchali. "If you include water, gas, electricity...and you look at prices holistically then you have an agreement that will be sovereign enforced."

    • Upvote 2
  17. Confederalism: a "comprehensive solution" to Baghdad-Erbil long-standing dispute

     
     2020/07/16 14:32:50
     

    Shafaq News / The United Nations, in coordination with the Presidents of the Republic and the government in Iraq, developed a road map for a "comprehensive" solution to the outstanding issues between Baghdad and the Region of Kurdistan, based on the application of the Confederation system.
    The Confederation defines the state as an organization and a political entity, and a link between different societies, aiming to bring order, security and law enforcement within a geographical area.
    In this regard, Shafaq News knew, from a political source close to the decision center in Iraq, that the representative of the Secretary-General of the United Nations, Jeanine Hennis-Plasschaert recently intensified her efforts to offer a solution to the problems between Baghdad and Erbil, especially the file of Oil, salaries and border crossing, by offering the solution of "the confederation system".
    The source added that the Turkish-Iranian armed interventions in the regions of Kurdistan Region and Nineveh, in addition to the failure of the negotiations between Baghdad and the region posed an additional impetus for the presentation of this proposal, which also enjoys the support of major countries, most prominently USA.
    Plasschaermet, according to the statement, met with the President of the Republic, Barham Salih, with whom she discussed the project. Salih approved, as did the Prime Minister Mustafa Al-Kadhimi, who did not register an objection in this regard. Plasschaermet also met the political leadership in Kurdistan Region and held extensive discussions over the project.
    Kurdistan Region, according to the source, informed the United Nations that its approval is granted only under international guarantee, "Erbil does not want to repeat the failure of not implementing the Iraqi constitution".
    Although Kurdistan has enjoyed political independence since 1991, and the region was installed under the 2005 Iraqi constitution as a federal entity, the outstanding differences between Baghdad and Erbil have not known a way to a comprehensive solution. The tension rose between the two sides when Kurdistan launched a referendum on independence from Iraq in the fall of 2017, which was supported by more than 90% of the population of the region.

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  18. Al-Rikabi: ONE law to solve disagreements

     
     2020/07/15 17:14:28
     

    Shafaq News / a member of the State of Law Coalition, MP Kata'a al-Rikabi, today, Wednesday, called for adopting  "one" law to resolve disagreements  between the federal government and the Kurdistan Government.

    al-Rikabi told Shafaq News agency that, "The differences between the two governments can only be resolved through legislation of The oil and gas law, which has been suspended in the Iraqi parliament for years”, adding that “this law governs the relationship and dealings between Baghdad and Erbil”.

    Al-Rikabi revealed that "there is a parliamentary movement among the majority of Iraqi political forces, for the legislation of the oil and gas law as fast as possible".

    It is noteworthy that the differences and pending issues between Erbil and Baghdad are mostly based on the region's share of financial budgets, Peshmerga financial benefits, oil exports, and disputed areas, covered by Article 140 of the Iraqi constitution.

    Earlier, Kurdistan expressed its readiness to deliver 250,000 barrels of crude oil per day in exchange for the Iraqi government financing 450,000 billion dinars as monthly salaries.

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  19. Almost there................. but

    Nearly there,..................until.

    Very soon......................need a little more time.

    We are very serious...........but want better terms

    We need help................... who can be bothered though.

    Let's have a meeting...........lets have more.

    We are ready to sign...........but not quite yet.

    Within the constitution ......... it's never been put in place.

    We are going to Baghdad............but not sure when.

    We all agree....................... to total different meanings.

    We will send all the oil...................not this year though.

    We have friends....................we have more.

    All Iraqis are suffering...............but we are OK jack.

    Let's smile for the cameras..............we hate you.

    What biscuits shall we have at the meetings.............the usual ones please.

    Do we have a deal.................no.

    OK see you next year.................................................................................................................................................................!

     

    Round 2, 3, 4, 5,

    Rinse and repeat.

     

     

     

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  20. SULAIMANI — A Kurdistan Democratic Party (KDP) lawmaker in the Council of Representatives said on Monday (July 6) that a delegation of Kurdistan Regional Government (KRG) officials will visit Baghdad on Tuesday to continue talks with the federal government in pursuit of a comprehensive budget agreement.

    Handren Doski told his party’s official media that Erbil is serious about reaching an agreement with Baghdad and vice versa, arguing that “there are no huge obstacles to reaching an agreement.”

    “There are still some technical details about resolving the issues. If they are resolved then an agreement will definitely be made. I am optimistic about achieving a good result,” he said.

    Despite Doski’s confidence, an agreement has proved elusive so far and the price of not finding one costly for the KRG.

    In late April, Baghdad cut off all budget transfers to Erbil, leaving it with a massive shortfall. Unable to pay its public sector workers on time or in full, the KRG has repeated delayed distribution of salaries and cut the pay of most workers by 21 percent or more.

    “Iraq itself has some problems that are obstacles in front of the agreement between the Region and Baghdad, including the spread of coronavirus, the fall in oil prices, and the changes that [Iraqi Prime Minister] Mustafa al-Kadhimi wants to make,” the KDP lawmaker added.

    (NRT Digital Media) 

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