(Okay, so now you know why the Oil and Gas Law is so important to Iraq and we most likely will NOT see the reinstatement until this constitutional requirement is met and the law is passed in parliament.)
The head of the Azm Alliance, Muthanna al-Samarrai, confirmed today, Monday (January 20, 2025), that the Iraqi economy is “bleeding” due to the halting of the region’s oil exports.
“While we stress the importance of the oil file, as it is the main source of state treasury resources, we express our surprise at the misleading statements and irresponsible actions that seek to obstruct technical procedures and practical solutions to address pending economic files,” he said in a statement received by Baghdad Today, indicating that “the general budget witnessed a loss of large sums as a result of the cessation of oil exports produced in the Kurdistan Region, for technical reasons related to determining production and transportation costs and the dues of international oil companies operating in the region.”
He added that “this halt was the result of accurate or inaccurate price estimates of the costs of oil extracted from the region’s fields, as production costs vary according to the nature of the land and the depth of the oil wells. For example, the cost of production in Basra fields reaches about $6 per barrel, while the cost in some of the region’s fields exceeds $20 per barrel.”
Al-Samarrai explained that “the price stipulated in the amendment to the law ($16) represents a preliminary estimate and not a final one, and is subject to auditing by the advisory body referred to in the amendment proposal, in addition to the auditing of the Federal Financial Supervision Bureau. This amendment is necessary to support the implementation of the approved budget items, especially the items related to oil imports, in light of the increase in public expenditures and the worsening financial deficit.”
He pointed out that “the halt in the export of the region’s oil and part of Kirkuk’s oil during the past months led to huge losses for the Iraqi economy, exceeding $18 billion in value. From this standpoint, the government is responsible for implementing the provisions of the government program, most notably the oil file, by finding effective technical solutions. This is a responsibility that the Federal Ministry of Oil stressed the importance of and supported moving forward with amending the budget law to achieve it.”
The head of the Azm Alliance pointed out that “the oil export mechanism, stipulated in the budget law, was carried out through the Iraqi Oil Marketing Company (SOMO), in accordance with the constitution and the decisions of the esteemed Federal Court.” He concluded by saying: “Based on the above, we hope that the heads of the alliances, members of the State Administration Alliance, and members of the House of Representatives will proceed with the legislation to amend the budget law.”
