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December 11, 2008



The writer refers to a "reported agreement", then to "this agreement", and the argument is based on there being an actual agreement. I thought it was clear there were talks but no agreement. Am I missing something? Could you provide a link to any report that says there was actually an agreement?


According to Azzaman, the Baghdad-Kurd export deal is dead. Link:


Baghdad demanded that the Kurds renounce their independent oil deals and they wouldn't give in. The Kurds also wanted a cut of some of the oil profits and Baghdad refused.

In terms of the Iraqi budget, it looks like some pretty drastic budget cuts and austerity measures are on the way. They based the budget on a $62 a barrel price, and world prices are now down in the $40s, plus an oil official said exports are estimated to drop next year because of deteriorating infrastructure.

I've written several pieces on these events recently as well on my blog if anyone is interested. http://musingsoniraq.blogspot.com/


As I read it,

On a KRG export of (say) 250.000 bopd, Shahristani wants it all and send 17% to KRG, ie 207.500 for Baghdad, 42.500 to KRG and not one barrel to the "illegal" oil company that made the export possible in the first place. KRG wants (lets say) a 20% cut amounting to 50.000 bopd to the oil company that made the export possible in the first place, a 17% cut of the remaining volume or 34.000 for KRG and the rest for Baghdad, ie 166.000.

As investment may continue and possibly grow, I bet KRG sees the benefit of having a prosperous oil company around. In the meantime we`re talking no revenue on 166.000 bopd to Baghdad because Shahristani wants 207.500 and show the oil company out the door.

I can understand Baghdad wants control with money flows but as per constitution they don`t have it (not that anyone in power could care less). But this is tragic. In real politics such a revenue loss spells political "disaster" even without financial collaps.

When is Shahristani facing his constituents?

I owe it to admit I have stock in an oil company working in a KRG controlled area.


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