Azerbaijan, Baku, Nov. 30 / Trend /
Oil producers in Iraqi Kurdish autonomy have reduced the volume of oil they are supplying for export through Iraq's pipeline to Turkey to under 100,000 barrels per day (bpd), also cutting production as export flows drop, International Oil Daily (IOD) reported with the reference to the industry sources.
"The big problem is payment," one said, adding that this reflects negatively on the prospect for exports going forward.
According to the source, all the exporting companies are telling Iraqi Kurdish autonomy's natural resources ministry that they need money, and if it stays like this, companies cannot recover the costs of operating and sustain production.
IOD reported that producers are also concerned over the level of funding allocated to cover their costs in the federal government's draft 2012 budget, under which Iraqi Kurdish autonomy is to supply 250,000 bpd for export. "It's all related to the money issue," a source told.
According to the agreement reached between Iraqi central government and the Kurdish autonomy on oil payments, Baghdad will repay all the debts for the oil export to the autonomy and will pay for the work of foreign companies in the autonomy. The Kurdish side will continue to supply oil to the central government, stopped four months ago.
In September Oil Minister of the autonomy Ashti Hawrami said that an agreement on arrear payment for oil supply with the Central government is a temporary, which will operate until the oil law was adopted by the Iraqi Parliament.
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.
Edited by: A.Badalova