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Iraq
Kurds reduce oil supplies for non-payment of Baghdad's debts
2012-12-09
More bad blood...
The Kurdish autonomy of Iraq has reduced oil supplies to the central government on account of non-payment of debts to foreign companies operating on its territory. Ali Hussein Balou, an adviser to the Kurdish Ministry of Natural Resources made this statement, the Government of the Kurdish autonomy's website reported.

According to Balou, the Kurdish autonomy reduced supplies from 250,000 barrels per day to 100,000 barrels per day.

"The central government of Iraq following an agreement on the payment of debts to foreign companies made the payment to the sum of $650 million in October 2012. However, in November Baghdad suspended payment of its debts. According to the agreement, in November the central government had to pay $350 million," Balou said.
Fail to pay your bills long enough and people turn off the spigot. Champ and Timmy will figure this out eventually when the Chinese refuse to buy more bonds. No doubt they'll be as surprised about that as Baghdad is today about the oil...
Earlier, in September 2012, the central government of Iraq and the Kurdish autonomy reached an agreement on oil payments under which Baghdad will return all its debts to the autonomy for oil exports and will pay for the work of foreign companies. The Kurdish side in turn, would continue to supply oil to the central government, interrupted four months ago.

Relations between the Kurdish administration in northern Iraq and Baghdad deteriorated in October 2011 after US-based Exxon Mobil received permission from the Kurdish authorities on the exploration and production of oil in this Iraqi region. Baghdad considered the deal illegal and warned the company that if it did not abandon the agreement with the Kurds, its deals with the central Iraqi government may be revised.

The Kurdish administration in northern Iraq has oil reserves of 45 billion barrels.
Posted by:Steve White

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