Kurdish lawmakers walked out of Iraq's parliament on Saturday when they learned of a proposal that would cut Iraqi Kurdistan's share of the 2011 national budget if the region fails to deliver crude oil for export.
The semi-autonomous northern Kurdish region has been locked in a dispute with the central government in Baghdad over contracts signed by the Kurdistan Regional Government with foreign companies to develop northern oilfields. Baghdad says the deals are illegal.
The disagreement halted exports from Iraqi Kurdistan last year. Iraqi Oil Minister Hussain al-Shahristani said this month Kurdish oil was expected to flow early next year.
Mohammed Kiyani, a Kurdish politician, said lawmakers had temporarily walked out on the first reading of the budget in parliament after hearing that the Kurdish share would be slashed each time the flow of crude stopped.
"If the export of oil stops, at any time and for any reason, the revenue for that amount will be cut from the Kurdish share of the budget. It's not fair and it's a collective punishment against Kurdish people," Kiyani told Reuters.
The Kurdish region was exporting around 100,000 barrels per day (bpd) before the flow was halted last year. Shahristani said the region could produce 150,000 bpd next year.
Iraq's exports last month were just over 1.9 million bpd.
The government is trying to ramp up output capacity to 12 million bpd within six or seven years -- a figure that would rival global leader Saudi Arabia -- from 2.5 million bpd now. But most analysts say that figure is unrealistic.
$73 Oil in budget
Iraq's cabinet approved a draft 2011 budget in November based on an oil price of $73 a barrel and output of 2.25 million barrels a day next year. The budget still needs parliamentary approval.
Mahmoud Othman, a Kurdish lawmaker, said his bloc had objected to the draft and called for it to be reviewed by parliament's financial committee.
"(The) draft budget was submitted for a first reading without being reviewed by the financial committee of parliament and this is unconstitutional," Othman told Reuters.
A request from the Kurdish bloc to disregard Saturday's first reading and to re-submit it for review was ignored by parliament, Kurdish member Fouad Masoum said.
Any complaints over the first reading of the budget had to be submitted to the financial committee before the second reading of the budget on Tuesday, Masoum added.
Output from the Kurdish region is seen as a key to boosting exports, which provide Iraq with about 95 percent of its federal revenue.
Shahristani, the architect of plans to turn Iraq into a top global oil producer, is to be reappointed oil minister when a new cabinet is revealed on Monday, senior officials told Reuters on Saturday.
ReutersLast Mod: 19 Aralık 2010, 13:02