Iraq Kurds confident of compromise with Baghdad over oil exports

ARBIL, Iraq Mon Jan 13, 2014 8:04am EST

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ARBIL, Iraq Jan 13 (Reuters) - Iraqi Kurdistan is confident it can soon find a compromise with Baghdad in a row over oil exports from the autonomous region via a new pipeline to Turkey, a spokesman said on Monday.

The Kurdistan Regional Government (KRG) last week said crude had begun to flow through its independent pipeline to Turkey, and that exports were on track to begin at the end of this month, rising in February and March.

In an interview with Reuters on Sunday, Iraq's Prime Minister Nuri al-Maliki threatened to cut Kurdistan's 17 percent share of the federal budget if exports via the pipeline went ahead without central government consent.

A delegation led by Kurdish Prime Minister Nechirvan Barzani is due in Baghdad soon to discuss the issue, which stems from a fundamental, longstanding disagreement over how to manage Iraq's resources and divide the proceeds.

KRG spokesman Safeen Dizayee said the Kurds were awaiting Baghdad's response to several unspecified proposals, and were committed to an accord reached in the Iraqi capital on Dec. 25.

"The framework was already agreed in Baghdad - it's more a matter of the technicalities," Dizayee told Reuters, adding he was optimistic and foresaw no major stumbling blocks. "It's just a matter of sitting down and agreeing on it."

The details of the Dec. 25 agreement have not been disclosed but it called for joint committees to resolve the dispute.

Crude from Kurdistan used to be shipped to Turkey through a pipeline controlled by Baghdad, but those exports dried up a year ago due to a row over payments for oil companies operating in the region.

Since then the Kurds have trucked smaller quantities of crude to Turkey while laying their own independent pipeline, angering Baghdad, which claims sole authority over oil exports.

Previous rounds of talks have borne little fruit, but industry sources say a bargain is still on the cards.

"The Turks encouraged these negotiations," one industry source said on condition of anonymity.

"The question is: if the Kurds negotiate in good faith and Baghdad negotiates in good faith and there is still no agreement, is that enough for Turkey to honour its independent export agreement with Kurdistan?" the source said.

"The answer is yes. And that pressure should lead to a deal between Arbil and Baghdad that is mutually beneficial for Iraq." (Reporting by Isabel Coles; editing by Alistair Lyon and Jason Neely)

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