Peregraf Is Anchored on Trust

EXCULSIVE: KRG will review its contracts with the oil companies and Turkey, minister says

EXCULSIVE: KRG will review its contracts with the oil companies and Turkey, minister says
Workers set up pipeline to transport oil from Kurdistan Region of Iraq to Turkey’s Ceyhan port in 2013. Photo: Peregraf

Peregraf- Surkew Mohammed

It is becoming a year since Prime Minister Masrour Barzani has formed his cabinet; however, the oil sector, the main source of the Kurdistan Regional Government’s (KRG) revenue, remains vague to the political parties in the government, including the Change movement, which holds the ministry of finance and economy, a Change movement minister tells Peregraf.

The Minister of Housing and Reconstruction, Dana Abdulkareem, who belongs to the Change movement, in an exclusive interview to Peregraf, said that they have requested to review the oil sector, which has been decided on. A new committee will negotiate with the oil companies and will also review the 50 year-contract that the KRG signed with Turkey in 2013.

“Change movement’s team in the government is not informed about the 50 year-contract and does not know about its content. We have requested to review the entire oil sector, including the 50 year-contract. The review has been decided on,” Abdulkareem said.

Abdulkareem revealed that the council of ministries in its latest meeting decided to form a new committee to review and negotiate with the oil companies “because the oil sector, not only for us, but also for majority in the cabinet is not clear and requires revision. Neither oil revenue nor its expenditure is obvious.”

The oil sector has always been the subject that the KRG has strongly been criticized for and has been accused of corruption, especially by the Change movement before joining the new cabinet of the government. Currently, they are in the government and occupy the ministry of finance and economy, who is simultaneously a member of the KRG's Regional Council for Oil and Gas Affairs, then why they are not informed about such a sector?

Abdulakreem responded to this question and said, “The mechanism of work has been that the ministry of natural resources is responsible for selling oil and receiving its revenue. The same ministry has deducted the expenditure, including the payment of the oil companies, from the oil revenues. Later, it has handed over the remaining revenue to the ministry of finance and economy, meaning that the ministry of finance is only aware of the revenue it has received from the ministry of natural resources. Now, we are in the process of changing this mechanism.”

The KRG made several decisions in 2016 to address the criticism and the accusation of corruption in the oil sector, especially in the amount of oil it exports and the amount of revenue its oil sector generates. On October 5, 2016, the KRG signed a contract with Deloitte Company to audit the oil sector, as it was one of the decisions.

Abdulkareem commented on Deloitte’s reports and claimed that, “it is correct that Deloitte audits [KRG] oil export and oil revenue and publishes reports on the sector, which can be relied on scientifically, but the reality of oil sector requires reconsideration.”

Peregraf also asked Abdulkareem about the ongoing negotiations between Baghdad and Erbil on oil and budget as well as about reform process in the KRG, which Change movement claims that it is the reason for their participation in the government.

“The KRG is ready to hand over the oil sector [not only the oil revenue] to Baghdad and the other non-oil revenue, as well, but on the condition that the federal government will transfer the budget share of the KRG, including the salaries and funds of the projects,” Abdulkareem spoke on the negotiations between Baghdad and Erbil.

“If the Iraqi government asks for the entire revenue and in return sends half of your budget, then how would you allocate the other half? You would have left no revenue for yourself, then how would you administer the Kurdistan Region? Anyone, who knows the alphabets of administration, would not turn himself into that reality.”

The negotiations between the KRG and the Iraqi government is ongoing and the KRG delegation is scheduled to visit Baghdad once more this week. “What is noticed is that they [the Iraqi government] does not want to send the budget share of the KRG,” said Abdulkareem.

Peregraf asked Abdulkareem about the fate of the KRG contracts with the oil companies as well as the 50 year-contract the KRG has with Turkey if oil sector is handed over to Baghdad, “The contracts with the oil companies and the 50 year-contract with Turkey will fall within that framework and will need to be solved.”

Erbil and Baghdad negotiations happen at a time when the KRG experiences an economic crisis, to the degree that it has reduced civil servants’ salaries by 21 percent for this months and it is unclear how it will provide next month’s salaries.

Abdulkareem claimed that despite the negotiations to reach an agreement with Baghdad, they keep eyes on the reform law, implemented this month to reform salaries and pensions, hoping that it will ease the burden on the shoulder of the government, so that they will be able to pay salaries in full next month.

“From this month onward, it will be known whether reform can be implemented or not. Change movement’s ministerial team insists on the implementation of the reform law. If we see reform with our eyes in this stage, then we can say that we have confidence that reform will be carried out.”

Abdulkareem said that the critics against the current cabinet is because of the “shortcomings of the previous cabinet.” What this cabinet has started is “reform and there is the hope that it will implement reform.”

After reforming salaries and pensions, the KRG is writing a draft for law for the second phase of reform, which is about cutting the sources that have led to corruption.

“Personal and partisan interest that directly or indirectly take part of the KRG revenue. This law will set a mechanism that would prevent that," Abdulkareem commented on the type of corruption that the law aims to prevent.

The Change movement’s minister also mentioned that the steps to implement reform have taken the right path, but to restore people’s trust in reform process, it has to be seen by actions.

EXCULSIVE: KRG will review its contracts with the oil companies and Turkey, minister says

2020-07-06 17:07:58

Peregraf- Surkew Mohammed

It is becoming a year since Prime Minister Masrour Barzani has formed his cabinet; however, the oil sector, the main source of the Kurdistan Regional Government’s (KRG) revenue, remains vague to the political parties in the government, including the Change movement, which holds the ministry of finance and economy, a Change movement minister tells Peregraf.

The Minister of Housing and Reconstruction, Dana Abdulkareem, who belongs to the Change movement, in an exclusive interview to Peregraf, said that they have requested to review the oil sector, which has been decided on. A new committee will negotiate with the oil companies and will also review the 50 year-contract that the KRG signed with Turkey in 2013.

“Change movement’s team in the government is not informed about the 50 year-contract and does not know about its content. We have requested to review the entire oil sector, including the 50 year-contract. The review has been decided on,” Abdulkareem said.

Abdulkareem revealed that the council of ministries in its latest meeting decided to form a new committee to review and negotiate with the oil companies “because the oil sector, not only for us, but also for majority in the cabinet is not clear and requires revision. Neither oil revenue nor its expenditure is obvious.”

The oil sector has always been the subject that the KRG has strongly been criticized for and has been accused of corruption, especially by the Change movement before joining the new cabinet of the government. Currently, they are in the government and occupy the ministry of finance and economy, who is simultaneously a member of the KRG's Regional Council for Oil and Gas Affairs, then why they are not informed about such a sector?

Abdulakreem responded to this question and said, “The mechanism of work has been that the ministry of natural resources is responsible for selling oil and receiving its revenue. The same ministry has deducted the expenditure, including the payment of the oil companies, from the oil revenues. Later, it has handed over the remaining revenue to the ministry of finance and economy, meaning that the ministry of finance is only aware of the revenue it has received from the ministry of natural resources. Now, we are in the process of changing this mechanism.”

The KRG made several decisions in 2016 to address the criticism and the accusation of corruption in the oil sector, especially in the amount of oil it exports and the amount of revenue its oil sector generates. On October 5, 2016, the KRG signed a contract with Deloitte Company to audit the oil sector, as it was one of the decisions.

Abdulkareem commented on Deloitte’s reports and claimed that, “it is correct that Deloitte audits [KRG] oil export and oil revenue and publishes reports on the sector, which can be relied on scientifically, but the reality of oil sector requires reconsideration.”

Peregraf also asked Abdulkareem about the ongoing negotiations between Baghdad and Erbil on oil and budget as well as about reform process in the KRG, which Change movement claims that it is the reason for their participation in the government.

“The KRG is ready to hand over the oil sector [not only the oil revenue] to Baghdad and the other non-oil revenue, as well, but on the condition that the federal government will transfer the budget share of the KRG, including the salaries and funds of the projects,” Abdulkareem spoke on the negotiations between Baghdad and Erbil.

“If the Iraqi government asks for the entire revenue and in return sends half of your budget, then how would you allocate the other half? You would have left no revenue for yourself, then how would you administer the Kurdistan Region? Anyone, who knows the alphabets of administration, would not turn himself into that reality.”

The negotiations between the KRG and the Iraqi government is ongoing and the KRG delegation is scheduled to visit Baghdad once more this week. “What is noticed is that they [the Iraqi government] does not want to send the budget share of the KRG,” said Abdulkareem.

Peregraf asked Abdulkareem about the fate of the KRG contracts with the oil companies as well as the 50 year-contract the KRG has with Turkey if oil sector is handed over to Baghdad, “The contracts with the oil companies and the 50 year-contract with Turkey will fall within that framework and will need to be solved.”

Erbil and Baghdad negotiations happen at a time when the KRG experiences an economic crisis, to the degree that it has reduced civil servants’ salaries by 21 percent for this months and it is unclear how it will provide next month’s salaries.

Abdulkareem claimed that despite the negotiations to reach an agreement with Baghdad, they keep eyes on the reform law, implemented this month to reform salaries and pensions, hoping that it will ease the burden on the shoulder of the government, so that they will be able to pay salaries in full next month.

“From this month onward, it will be known whether reform can be implemented or not. Change movement’s ministerial team insists on the implementation of the reform law. If we see reform with our eyes in this stage, then we can say that we have confidence that reform will be carried out.”

Abdulkareem said that the critics against the current cabinet is because of the “shortcomings of the previous cabinet.” What this cabinet has started is “reform and there is the hope that it will implement reform.”

After reforming salaries and pensions, the KRG is writing a draft for law for the second phase of reform, which is about cutting the sources that have led to corruption.

“Personal and partisan interest that directly or indirectly take part of the KRG revenue. This law will set a mechanism that would prevent that," Abdulkareem commented on the type of corruption that the law aims to prevent.

The Change movement’s minister also mentioned that the steps to implement reform have taken the right path, but to restore people’s trust in reform process, it has to be seen by actions.