Iraq: Baghdad-Erbil Accord Over Oil Sales Breaking Down

Feb 17, 2015 | World Bulletin
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The Dec. 5 oil-revenue sharing agreement between the Kurdish Regional Government, or KRG, and the Iraqi central government is unwinding, observers and experts said on Tuesday.

“The KRG is not shipping the amount of oil stated in the agreement to SOMO, the Iraqi state marketing authority," explained Richard Mallinson, a senior analyst with think tank Energy Aspects in London. “Only 400,000 of the 500,000 tons due in January were sent.”

The Iraqi government has also not met payments to Erbil, Mallinson said. “Less than $300 million of the $500 million due have been paid. The KRG is painfully short of funds and cannot keep the agreement for much longer if it is to meet public payments. Altogether, there is a lack of trust between the two parties that is causing the agreement to break down.”