The long lasting controversy between Iraqi government and local government body of Kurdistan over payments of oil companies seems to find a way of solution – as explained by an Iraqi official.
Ibrahim al-Jaafari, leader of pro-government national alliance declared that the two parties have agreed to come under a legal framework to initiate the payment of the oil companies, which are working in the Kurdish region for oil mining.
Rages were building and conflictions were getting strong in as the Iraqi state of Kurdistan has allowed foreign oil companies to explore the oil in this region without discussing with the central government’s concerning bodies.
A lot of oil companies are working in this region, which has been sighted illegal by Baghdad. According to the report, the foreign oil companies have helped the Kurdish region to explore 1 million barrels a day in a few years.
According to new agreement, Kurdistan oil would be exported through Iraqi national pipelines and Iraqi national exchequer will receive the royalties.
Jaafari stated that payment, around 4 USD billion is due and after establishment of legitimacy, money will be dispatched. It has been also decided that government will pay the amount to the Kurdistan foreign oil companies, through a separate budget allocation. An agreement will be made in order to do that and the agreement will also ensure that Kurdistan will pass all its oil through national pipelines of Iraq. Government of Baghdad will collect all the royalties in exchange of oil supply aid.
Previously, the state of Kurdistan was agreed upon the terms that it would deliver 175,000 barrels a day through national oil pipelines to export the oil outside of the country. In spite of that supply fluctuated in a range of 100,000 to 120,000 barrels per day, before the conflictions regarding the payment of the foreign oil companies took place.