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Kurdistan Regional Government (KRG) Owes International Oil Companies US$2 Billion

Not long after oil sharing agreeement was signed, KRG halted transfers of oil to State Organization for Marketing Oil and therefore, Baghdad stopped making transfers of federal funds.

According to Kurdistan Regional Government Oil Minister, Ashti Hawrami, international companies are owed an excess of US$2 billion. Mr. Hawrami stated, “Since the Kurdish leadership decided to sell oil independently on June 2, 2015, we have faced several issues including the fight against Daesh [Islamic State] and the slump in the price of oil.”

Partly due to this problem is the collapse of the revenue sharing agreement that was signed in 2014 by Baghdad and KRG. This agreement was meant to provide KRG with 17 percent of the federal budget in return for exports amounting in 550,000 barrels per day 

Not long after the oil sharing agreement was signed, KRG halted transfers of oil to State Organization for Marketing Oil and therefore, Baghdad stopped making transfers of federal funds. 

In June, the KRG began independent oil transfers meaning transfers to SOMO ceased. KRG Oil Minister, Mr. Hawrami also stated that issues would continue in Kurdistan despite higher oil prices. 

 

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