Who is responsible?

D. Yousef Mohammed Sadiq

In early 2014, the Presidency of the seventh cabinet of the Kurdistan Region, in Saad Abdullah Hall, organized a meeting with members of the fourth session of the Kurdistan Parliament, the leader of the Kurdish factions of the second session of the Iraqi Parliament Kurds in the Finance and Oil and Gas Committees of the House of Representatives. It was the day when the then Minister of Finance, Rahmati Sheikh Bayaz, said: “They have taken my bag yet!”
The aim of the meeting was to discuss the issue of independent oil sales and financial problems between the Kurdistan Region and Baghdad, which then as now, Baghdad had just cut the budget of the region. On that day, in several other meetings between the government and the Kurdistan Parliament, the then Prime Minister Nechirvan Barzani and Dr. Former Natural Resources Minister Ashti Hawrami and the government team argued that it was in the region’s interest to sell oil independently, thus creating an independent economy. Ashti Hawrami presented several charts that are attached and according to these charts, by the end of 2015, the oil fields in the region alone, excluding Kirkuk fields, oil exports to reach about one million (1,060,000) barrels According to Ashti Hawrami, the KRG’s monthly revenue at the end of 2015 will be more than $3 billion (3,222,000,000)! At the same time, we criticized this policy and in a meeting with the Regional Council for Oil and Gas before the presidential elections of the fourth session of parliament, we said that if all oil countries rely on oil as an individual If the source of income is wrong because of the volatility of oil prices, it is doubly wrong for the region, because it has no access to international waters and its oil exports are always held hostage Policy of neighboring states.
However, the oil reserves of the Kurdistan Region as announced by the Ministry of Natural Resources in 2009 was (45) billion barrels, which ranked the region ninth in the world. The Kurdistan Region’s natural gas reserves were estimated at 200 trillion cubic feet, ranking it eighth in the world.
Now, six years after these false claims, the amount of oil production in the Kurdistan Region is less than half a million barrels per day, and in terms of revenue, the sale of oil in the region is now reported It’s a loss, not a gain!
The losses of auctioning the region’s underground resources
The failed policy of independent oil sales has caused several major economic, political and strategic losses in the Kurdistan Region. including:
First, because of this policy and the independent sale of oil, Baghdad cut the budget of the region, and the oil sold by the region, or rather the oil looted by the region, could never replace that part of the Iraqi budget. Between 2003 and 2014, according to a study by Mohammed Awad al-Atabi, 91,076,988 dinars came to the Kurdistan Region from Iraq alone. However, this share of the KRG’s budget in Baghdad has been constantly increasing. For example, the 2013 budget of the Kurdistan Region (15,338,053) was fifteen trillion three hundred and thirty-eight billion fifty-three million dinars. As is well known, all the projects in the region belonged to the time when the budget came from Baghdad. From 2014 to 2018, no budget came from Baghdad to the Kurdistan Region except in early
Since then, the region has owed eight full salaries and 34 arrears. Who is responsible for the absence of tens of billions of dollars from the Kurdistan Regional Government’s budget from Baghdad?
Second, the region is said to have owed more than $20 billion due to independent oil sales. However, it is not known whether this is true or not. why is it done If so, has oil been sold or bought!? But if so, the citizens of the region will be placed under the burden of long-term debt that will take years to get out of.
Third, due to the independent sale of oil, hundreds of millions of barrels of oil for the present and future generations of the region were sold cheaply and wasted. Not only has the share of future generations not been taken into account, but the present generations are also deprived of its benefits.
• Most of the processes of exploration, production, transportation, sale, collection and distribution of oil and gas revenues in the region are unclear and it is not known what will be done with them. As a result, the people of the region are becoming poorer and poorer, and an elite is increasing their capital like a mafia.
• Apart from the oil and gas revenues, even the sweet money (commission) of the contracts is not known. In 2009, Nechirvan Barzani, the prime minister of the fifth cabinet, announced that the amount of (billion) sweet oil contracts for the sixth cabinet headed by Dr. Barham Salih, leaves. Nobody knows what happened to the money between the two cabinets!? How many other contracts have been signed since then? How much is their commission money? where is it whose is it Who is responsible for their disappearance? What is the role of the courts and the prosecutor general in investigating these cases? For example, Bloomberg reported that $250,000,000 million was received as sweets from the contract with Rosneft.
• The contracts that the Kurdistan Region has signed with oil and gas companies are in the form of participation, which provides a lot of profits for the companies and make them shareholders in the oil produced. These types of contracts are mostly made in places where there is a lot of risk and cost, for example in the sea. Iraq’s contracts are still service contracts, meaning that for each barrel of oil, Iraq pays companies a small amount of money, rather than making them profit-sharing. Therefore, the companies operating in the region have become large revenues, provided that some of them were originally small companies, for example, the Norwegian company (DNO) only in the year of oil profits The Kurdish people have become poorer thanks to these contracts and the salaries of the Kurdistan Regional Government employees have become quarterly and half salaries.
• As a consequence of the previous point, the cost of producing fields in the region is higher than the cost of producing oil in the region. According to Iraqi Oil Minister Samer Ghazban, the rent of oil companies for each barrel of oil from Iraqi oil fields ($ 1.44) is $ 1.44 cents. The cost of production and transportation is $9 per barrel. However, the profits of oil companies in the region vary according to the price of oil and thus the cost of production and transportation of oil in the region. However, according to Samer Ghazban, the region will receive 55 percent of the money from the sale of oil. Iraq receives 86 percent of its oil sales. That is why Iraq is not ready to take the money of the oil and gas companies in the region!
• The region will also lose money from extracting its oil elsewhere when it sells it independently. The price of oil in the Kurdistan Region is about $7 below Brent. Iraqi oil is $4 below Brent. So here too, the Kurdistan Region loses $3 per barrel compared to Iraq.
• Who is responsible for all these damaging contracts? So that the companies make more profits and the people of the region suffer more, the oil of the region is cheaper than the oil of other countries?
As a result of inexperience in contracting, giving too many concessions to companies, and the subsequent problems, sometimes the region has suffered billions of dollars in losses. The best example is the contract with Dana Gas, which forced the Kurdistan Region to pay $1.5 billion in compensation to the company. Who is responsible for paying this money from the daily pockets of the people of the region just to punish a legal dispute!? Did the people of the Kurdistan Region benefit from half of the compensation in the contract with the company?
• Due to the reliance on oil as the only source of income, other economic sectors such as agriculture, industry and tourism, despite the great potential of the region in this field, were disrupted. Instead of allocating the missing oil revenues to develop these sectors, much of the oil money has been wasted, and a kind of consumer economy has been developed that has greatly weakened production.
• All these reasons have made the extraction and sale of oil not the weapon and strength of the region against Baghdad, but on the contrary, the oil has become the weakness of the region in the balance of conflicts with Baghdad. The current oil policy of the Kurdistan Region has not only failed to create an independent economy for the region, but also made it a deadly backwardness of Baghdad. All the money that came to the Kurdistan Region from Baghdad, all the sweet money from the oil and gas contracts and the sale of their products, did not lead to a productive economic independence in the Kurdistan Region. Now the Kurdistan Region does not know what to do with its oil! On the one hand, it is under pressure from the oil companies, and on the other hand, it is under pressure from Baghdad. Who is responsible for the depletion of the region’s underground resources, the collapse of the region’s economy and its further weakening against Baghdad?
• As a result of the above, the weakness of the region in the oil and budget issues, led to the marginalization of the historical problems of the region with Baghdad, which is now in no way a priority on the agenda of the region with Baghdad it’s gone. Therefore, the Kurds of the conflict areas are still addicted to the policies, laws and decisions of the old and new Arabization. This is in addition to the risk of reorganization of terrorist groups in these areas and create a threat to the population and even the Kurdistan Region. Even when the entire conflict areas fell to Kurdish forces for the first time in the history of at least the past hundred years, instead of looking at the people tired of the conflict in these areas, including all its communities Unfortunately, they paid more attention to their oil and gas and neglected the people. The PUK and KDP in these regions, by adopting policies based on personal and party interests, have caused a large part of the Kurds in these regions, not to mention other communities, to want to return to the region don’t be. The region could have used its oil and gas reserves as a strong card to resolve other issues with Baghdad by demonstrating its oil and gas potential without selling it at auction and by expanding only one field to produce domestic needs. Especially the problem of the conflict areas.
• The wrong policy of the region in the field of oil and gas has weakened its regional relations. Because Turkey has become the only gateway for the Kurdistan Region to export its oil, the entire economy of the region has become hostage to Turkey. Not only that, but even politically, for a long time, the region became a backward Turkey.
reference:
1. Mohammed Awad al-Atabi: These Wealth of Iraq, A Comparative Statistical Study of Reconciliation Balances from General Year 2003, General Year 2018, p