Bloomberg News

Kurds Halt Crude Exports Over Pay Dispute With Baghdad

April 01, 2012

Authorities in Iraq’s semi- autonomous Kurdish region halted crude oil exports today due to a pay dispute with the central government in Baghdad.

The Iraqi government has failed to pay money owed to oil producers since May 2011, according to a statement from the Kurdish Ministry of Natural Resources. The ministry has estimated the amount owed at $1.5 billion.

“There have been no payments for 10 months, nor any indication from federal authorities that payments are forthcoming,” it said.

Last week the Kurdistan Regional Government called on foreign companies including BP Plc (BP/) not to make separate agreements with Iraq’s central government to develop oil fields in and around the disputed northern city of Kirkuk. The central government has said it is talking with BP about boosting output at a field called Kirkuk, near the same city.

In February Iraq produced 2.76 million barrels a day of crude, most of which comes from southern fields, according to data compiled by Bloomberg. The Kurds last week cut their production from 175,000 barrels a day to 50,000 barrels a day over the pay dispute.

An earlier disagreement over oil revenues between Iraq’s government and Kurdish authorities led to a yearlong halt in exports from the region that ended in February 2011. Iraq holds the world’s fifth-biggest crude reserves, based on BP statistics that also include Canadian oil sands, and it seeks to boost oil exports to help rebuild an economy recovering after years of conflict, sanctions and sabotage.

To contact the reporter on this story: Danielle Ivory in Washington at divory@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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