Iraqi Parliament deadlocked over KRG oil compensation in budget debate

Shafaq News/ The Iraqi parliament has once again been thrown into turmoil over the general budget law, with a key point of contention being Article 12, which deals with financial arrangements between the central government and the Kurdistan Regional Government (KRG).

The session scheduled to discuss the budget law was postponed following a deadlock, as political blocs and the Finance Committee failed to reach an agreement on compensating the KRG for the costs associated with oil production and transportation in the region.

The parliamentary session, initially set for Thursday, was called off after Kurdish blocs withdrew from the meeting, resulting in a lack of quorum. This came after the Finance Committee requested the Speaker of the House of Representatives to withdraw the budget amendment from the session’s agenda, citing incomplete discussions and unresolved issues.

MP Jiay Timor from the Kurdistan Democratic Party (KDP) explained that the delay stems from disagreements over the cost of oil extraction in the Kurdistan Region.

Timor told Shafaq News Agency that “a specialized international company would visit the KRG's oil fields to assess the cost of oil extraction, in line with the budget law amendment and a political agreement between the two sides.”

The debate over oil compensation centers around the cost of oil extraction in the Kurdistan Region. Timor highlighted that the Iraqi government had initially estimated the cost at $6 per barrel in the budget law, a figure he argued was far too low. “Foreign companies involved in oil extraction have estimated the cost to be as high as $26 per barrel due to the challenging terrain in which the Kurdistan Region's oil fields are located.”

“The oil fields are situated in mountainous and rocky areas, requiring deep drilling that is costly,” Timor said, noting that the Iraqi government had revised the extraction cost to $16 per barrel in the amended budget law, following further technical assessments.

In turn, MP Moein Al-Kadhimi, a member of the parliamentary Finance Committee, confirmed that the committee had held a meeting on Thursday to discuss Article 12 of the budget law but expressed frustration over the lack of progress.

“The committee had consulted with officials from the Ministry of Oil for technical input but had been hindered by the absence of the Minister of Finance.”

Al-Kadhimi noted that the delay was necessary to ensure the committee’s observations and discussions were fully addressed. “The Finance Committee submitted a request to withdraw the budget law amendment from the agenda, as the committee had not completed its work,” he said.

MP Mohammed Al-Ziyadi from the State of Law Coalition confirmed that the session was postponed to Saturday to allow for further deliberations.