Govted Sherwani, a Kurdish oil expert, confirmed on Sunday that the dialogue between Baghdad and Erbil to reach an agreement on the Kurdistan Region’s oil file and the nature of the joint mechanism for its management has become a necessary issue because it affects Iraq’s revenues, especially with the rise in global crude prices.
“The visit of the Federal Minister of Oil and his accompanying delegation today to Erbil reflects the seriousness of the Iraqi government, especially with the presence of a delegation that includes administrative and technical leaders in the ministry,” Sherwani said in an interview with Shafaq News Agency. This implies that the tactical, administrative, and budgetary components of restarting the process will be addressed.
In regards to the conflict between the two parties, Sherwani stated that “the dispute between the two sides revolves around the vision and perspective of the oil law, as the vision in the region is based on strengthening the reality of the federal status of the Kurdistan government, the institutions present in it, and the constitutional status.”
He went on to say, “While the vision in Baghdad is moving towards centralization, and according to Article 112 of the Constitution, it guarantees clear participation between the federal government and the oil-producing regions and governorates, this article is supposed to be taken into account clearly in distributing the tasks and responsibilities of managing the oil file, which we hope will be addressed professionally and practically.” On the subject of political and partisan influences.
When asked about the cost of producing oil in the region, Sherwani reported, “The estimates that were placed in the federal budget for oil production and transportation are $12 per barrel for production, and $7 for transporting one barrel, while the estimates presented by the Ministry of Natural Resources in the region amounted to $24 for production and $8.” For transportation, and these costs are typical given that the whole oil production and transit process is controlled by international private corporations, some of which are local, and these companies have operating and investment costs.”
He went on to say that “these numbers are realistic and close to what is paid to similar foreign companies contracting with the Federal Ministry of Oil within the so-called licensing rounds.”