Why is the rate of oil sales questionable?
Why is the rate of oil sales questionable?
  2023-03-20     348 جار بینراوە    


By Omar Gulpi: Member of the Finance Committee of the Kurdistan Parliament

 2022-08-06

Today, for the fourth time this year, to keep track of oil revenues, sales and revenue, I asked the Minister of Natural Resources once again.

I present to the Kurdistan public all the results of the investigation, opinions and information I have received about oil and its revenues, as follows:

1. How many barrels of oil does Kurdistan sell?

According to official government statistics for the year 2020, Kurdistan has sold 453,396 barrels of oil per day, and over the past six months, the rate has risen to more than 470,000 barrels per day due to rising production levels in several fields.

2. Why is the sales rate questionable?

Since the process of extraction to sale of oil is not monitored, no official agency outside a few government officials confirms the amount of oil sales. In addition to the data that the government itself gives to Deloitte, once a year! No other sources are available and the government has the following violations:

a) It does not provide information to the parliament and its members about oil sales and revenues.

b) It does not allow the Board of Supreme Audit to audit the oil file.

c) Flagrantly violates the provisions of both Law No. 21 of 2007 of the Ministry of Natural Resources and Law No. 22 of 2007 on Oil and Gas of the Kurdistan Region, especially the provisions of Articles 10 to 14 Law No. 22 relates to the establishment of a number of Kurdistan public companies to supervise oil activities, namely: (Kurdistan Oil Exploration and Investment Company, Kurdistan National Oil Company, Kurdistan Oil Marketing Company, Kurdistan Refining Company and its subsidiaries).

In other words, 13 years after the enactment of the law, the government is still not ready to create these companies, so that the people of the Kurdistan Region are aware of the process of discovery, export and marketing of oil and its revenues.

 

3. How much oil revenue has been earned?

Oil prices have risen sharply since the beginning of 2021, and continue to rise. Iraq sold oil at $53, $60 and $53 per barrel in the first three months of this year, reaching $65 in May and $68 to $70 in early June. According to the comparison of oil sales between the Kurdistan Region and Iraq, the difference is about (7 to 5 dollars,

The Kurdistan Region has sold oil at $47, $53, $56, $58 and $60 per barrel since the first five months of 2021, and $61 per barrel in June.

So the total amount of oil sales (including production and transportation costs) in the first five months of this year was as follows:

In January ($662,700,000), in February ($747,300,000), in March ($789,600,000), in April ($817,800,000), in May ($846,000,000).

According to Deloitte's previous data, the net revenue from oil sales in the first five months of 2021 after excluding production costs, wages and pipeline rents, was as follows:

- In January (351,231,000) dollars, which is: (509,284,950,000).

- In February (396,069,000) dollars, which is (574,300,050,000) dinars.

- In March (418,488,000) dollars, which is (606,807,600,000) dinars.

- In April (433,434,000) dollars, which is (628,479,300,000) dinars.

- In May (448,380,000) dollars, which is (650,151,000,000 dinars).
 

4. Is oil revenue reliable?

According to the provisions of both articles 15 and 16 of Law No. (22) of 2007, the government should have established the Kurdistan Oil Revenues Fund, in order to collect the revenues from the sale of Kurdistan oil in a transparent process

The fund should be subordinate to the monitoring institutions, and every citizen should know how much his monthly income is, but after 13 years, the authorities are not willing to do this. They have collected the oil revenues of the Kurdistan Region in the pockets of several people instead of the pockets of the institutions.

The uncertainty of oil revenues can be suspected of all kinds of abuse, from using it for the benefit of companies, parties and officials to putting it at the service of foreign companies and countries.

 

The result

1- Oil revenue is a huge revenue for the Kurdistan Region, and is more than 650 billion dinars monthly.

2. Except for a small group in the government consisting of Prime Minister, Deputy Prime Minister, Minister of Natural Resources, Minister of Finance, Minister of Planning, no one else is aware of the process of extracting to sell oil!

3. The Board of Supreme Audit is not allowed to conduct any audit of the oil process, not even preliminary information on the oil process is given to the Board of Supreme Audit.

4- The method of returning the oil money is not transparent and it is not known how this process will be carried out, which banks and companies benefit from this process and for whose benefit the process of exchanging dollars is carried out, which is a huge amount per month.

5. Only the amount of the central bank's surplus of 1,450 dinars per dollar, which is more than 22 billion dinars per month, is not known

 Whose pockets will these 22 billion dinars go to and in whose interest this exchange is done!

6. The government does not provide information to the parliament and MPs and continues its violations and illegal actions, which is a flagrant violation of the applicable laws.

We have a duty to inform the Kurdish people and the public about the revenues in all areas, especially oil revenues, in addition to the parliamentary procedures. Because we believe that oil is not the property of any party and the property of the Kurdish people, and the revenue must return to the general treasury. The hands of the party and its companies should be removed from the oil process and this looting should be stopped.

Oil revenues currently account for about 60 percent of the Kurdistan Region's total real revenue, which is approximately 1.1 trillion dinars per month.

If oil and its revenues, customs and revenues, taxes and fees and revenues are dealt with legally, there will be no financial problems in Kurdistan. However, the ruling parties are still not ready to return all these revenues to the public treasury, they ignore the interests of the Kurdish people, the blood of martyrs, tired Kurdish people and unemployed youth, to enrich themselves and their companies and parties.

The responsibility lies with the parliamentary majority that has chosen to remain silent about this bad situation of people's lives and has become the scepter of such a government.



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