SEATTLE (Oil Monster): Iraq's Kurdish authorities said on Sunday that Baghdad had failed to address security and economic challenges facing their oil sector, rejecting an accusation that they were refusing to allow crude exports through a regional pipeline.
The statement came after Iraq's oil ministry said the Kurdistan Regional Government had refused to let it use a pipeline as an alternative route for crude flows disrupted by the Iran conflict, accusing authorities there of putting in place arbitrary conditions.
The oil ministry's comments "distort the facts" and ignore the issues affecting the region, including repeated attacks on oil and gas infrastructure that have forced production offline, the KRG's Ministry of Natural Resources said in a statement.
"Outlaw militias have made all of the Kurdistan Region's oil, gas and energy fields targets of their attacks," the ministry said, adding that Baghdad had taken no effective steps to stop the assaults.
"As a result of these terrorist attacks, production has been taken offline, leaving no oil available for export," it said.
DISPUTE OVER DOLLAR 'EMBARGO'
The ministry also accused Baghdad of imposing what it called a "suffocating embargo" by restricting access to dollars for traders in the Kurdistan region under the implementation of a new electronic customs system.
A senior Kurdish government official earlier told Reuters authorities there would be happy for the Iraqi government to use the pipeline, but said Baghdad first needed to lift what he called a "dollar embargo" on the region.
"We want a deal. We want to help Iraq and bring relief to the markets, but this embargo must end first," the official said.
Iraq's oil ministry said the KRG's Ministry of Natural Resources had "set a number of conditions unrelated to the issue of crude oil exports."
Oil production from Iraq's main southern oilfields, where most of its crude is produced and exported, has plunged 70% to just 1.3 million bpd, sources told Reuters on March 8, as the Iran conflict effectively shut off the vital Strait of Hormuz.
Iraq's oil ministry sent a letter in early March to the Kurdistan Regional Government seeking permission to pump at least 100,000 barrels per day of crude from Kirkuk oilfields through the Kurdistan pipeline network to Turkey’s Ceyhan energy hub, two oil officials told Reuters last week.
Kurdish officials say tensions with Baghdad have risen after the federal government moved to implement a new electronic customs system, allowing it to monitor imports and revenues, a step the KRG sees as undermining its autonomy and control over trade.
Courtesy: www.reuters.com
