Oil companies operating in Kurdistan reduced production due to non-payment by federal government15/03/2012 15:52
BAGHDAD, March 15 (AKnews) - Foreign oil companies operating in the Kurdistan Region have reduced oil production because the federal government has yet to pay its outstanding debts, according to the oil and energy committee in the Iraqi Council of Representatives.
The committee suggested that uncontrolled technical problems also led to the decline in the region's exports.
Committee chairman Qassim Mohammed said the Kurdistan Region contracted foreign companies to explore and export oil and signed an agreement with the federal government to pay the dues of these companies.
The federal government did not comply with the agreement, said Mohammed.
"The decision of the companies is not political but it is an economic one taken by the foreign companies," he said.
The federal oil ministry revealed that the Kurdistan Region reduced its oil exports to almost two thirds of the required 175,000 barrels a day of oil.
"Two other causes were behind the decline in the region's oil exports," added Mohammed. "The first is the technical problems related to pipes pressure and the second is that the Kurdistan Regional Government transformed quantities of oil to refineries to process power plants [for the cold weather]."
"Basra province is planned to export 2.6 million barrels of oil a day, while it actually exports 2.2 million barrels a day because of technical problems. But this is not mentioned and only Kurdistan is blamed although the causes are the same."
According to a report by the State Organization for Oil Marketing, Iraq shipped 1.639 million barrels per day from the southern oil port of Basra in February, while 1.711 million barrels per day were shipped in January. The shipments from the northern fields around Kirkuk reached 375,000 barrels per day in February compared with 395,000 in January.
The report added that the reason for the decline in exports in February was the bad weather around the port of Basra as well as technical problems in the northern Kirkuk oil fields.
Iraq hopes to raise its oil exports for the current year to 2.6 million barrels per day.
Iraq relies on oil exports for 95 percent of its revenue. The country needs billions of dollars for the reconstruction of its crumbling infrastructure.
By Raman Brosk