Iraqi government orders probe into Kurdistan region’s oil exports

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Updated 09 January 2018

Iraqi government orders probe into Kurdistan region’s oil exports

BAGHDAD: The Iraqi parliament on Monday launched an investigation into the quantities of oil exported by the Kurdish regional government (KRG) during the past three years from Kirkuk’s oil fields and the Kurdish region.
It is seeking to prosecute officials involved in oil smuggling and to monitor their bank accounts inside and outside of Iraq.
KRG took advantage of the dramatic collapse of the Iraqi Army in June 2014 to drive Iraqi security forces out of the northern oil hub city of Kirkuk, its lucrative oil fields and all the nearby disputed areas. It seized control of oil exports from the area until Oct. 26 when Baghdad launched a huge military offensive to drive Kurdish forces into the Kurdish region.
KRG has been exporting an average of 400,000-650,000 bpd from Kirkuk and the fields of the Kurdish region, but exports have  halved since October as the federal government in Baghdad imposed a series of punitive measures including banning international flights from and to the region and shut down the border crossings between the region and Turkey, Iran and Syria.                     
The resolution approved by the parliament states that the investigation committee, which has to file its report in four weeks, will consist of the members of the Oil and Gas, Financial and Integrity parliamentary committees. The committees will investigate the quantities of oil exported during the period in which the fields were under the control of KRG, and the funds obtained from sales of oil, starting from July 1, 2014 until today.
“The (Kurdish region) has benefited from Kirkuk oil exports, and there are big questions relating to the revenues of oil,” Masoud Haider, a Kurdish federal lawmaker and a member of the Parliamentary Financial committee, told Arab News.
“We as the Kurdish bloc have many inquiries related to the (oil) revenues and the expenditure ... loads of oil has been exported (by KRG) but we (the Kurds in the region) do not know where the revenues go,” Haider said.
“(In Kurdistan), there are 120,000 people who receive government salaries who have not received more than a third of their salaries since 2014.”
A senior Iraqi federal oil official talking to Arab News on condition of anonymity said that the data of the federal Oil Ministry recorded in the past three years indicated that KRG had exported 800,000–850,000 bpd until October.
“KRG officials said that they were exporting just 500,000 bpd and using the rest for domestic consumption within the region,” the official said. “This is not true. 350,000 bpd is a very big amount and it is not reasonable to be used for the daily consumption in the region.”
“Our information suggest that there have been large oil-smuggling operations taking place in the region on an almost daily basis until today. They (the involved officials) used the tankers to smuggle oil of Kirkuk and the region to Turkey and Iran,” the official said.
A senior Kurdish lawmaker involved in talks between Baghdad and Kurdistan to solve issues between the two sides, including about oil, declined to be named but told Arab News that the records of the Oil and Gas Parliamentary Committee showed that oil exports carried out by KRG has dropped to 270,000–300,000 bpd since October, “but oil smuggling to Turkey and Iran has been continuing.” 
“Daily, 60,000 bpd has been smuggled by tankers to Iran and 100,000–150,000 bpd to Turkey,” the Kurdish lawmaker said.
The parliament resolution also asked the federal Oil Ministry to stop the work of “Kar” company — which has been appointed by KRG since 2014 to supervise oil exports from the Kirkuk fields to the Turkish port of Ceyhan — hand oil production in the Kirkuk oil fields to the state-owned North Oil Company (NOC) and submit all oil exports to the Iraqi Oil Marketing Company (SOMO).
“Kar” is a Kurdish oil company operating in Kurdistan. Kurdish lawmakers told Arab News that “Kar” is owned and established by Masoud Barazani, the former president of the Kurdish region and the most influential Kurdish figure in the country.
“The work of this (Kar) company in Kirkuk oil fields is unconstitutional as this is a private company and everything related to oil and gas should be under the control and supervision of the federal Oil Ministry,” A’awad Al-A’awadi, a member of the parliamentary Oil and Gas Committee, told Arab News.
“This company was appointed by the (Kurdish) regional government and KRG has no right to practice any works related to run the oil and gas in Kirkuk or anywhere else,” A’awadi said. 
Monday’s parliamentary resolution orders the Iraqi Central Bank to follow up amounts deposited in Iraqi and foreign banks as a result of the sales of oil extracted from the Kirkuk fields and the Kurdish region and present a detailed report including the amounts of money and names of officials who benefited from the sales.
“The government needs to know where the money gone, because this money were not spent in Kurdistan,” a senior federal official close to the Iraqi Prime Minister Haider Al-Abadi told Arab News on condition of anonymity.
“The Kurdish officials have admitted that they were exporting 500,000 bpd in the past three years, but they refuse to deliver any details relating to where the money went and how it was spent,” the official said.
“They were selling at prices below the price of SOMO by $6-10, in addition to the quantities of smuggled oil which they refuse to recognize,” he said.
“This file (the Kurdish officials involved in oil smuggling) cannot be closed (until there is) details about who (is involved), how much (money they got) and where (the banks accounts where the money deposited).”


Powell: No clear hint on rates but says Fed will aid economy

Updated 23 August 2019

Powell: No clear hint on rates but says Fed will aid economy

  • The outlook for the US economy, Powell said, remains favorable but continues to face risks
  • Trump, who has relentlessly attacked Powell and the Fed over its rate policies, kept up his verbal assaults on Twitter

WASHINGTON: Federal Reserve Chairman Jerome Powell sent no clear signal Friday that the Fed will further cut interest rates this year but said it would “act as appropriate” to sustain the expansion — phrasing that analysts see as suggesting rate cuts.
Powell said President Donald Trump’s trade wars have complicated the Fed’s ability to set interest rates and have contributed to a global economic slowdown.
Speaking to a gathering of central bankers in Jackson Hole, Wyoming, Powell didn’t give financial markets explicit guidance on whether or how many rate cuts might be coming the rest of the year. The Fed cut rates last month for the first time in a decade, and financial markets have baked in the likelihood of more rate cuts this year.
The outlook for the US economy, Powell said, remains favorable but continues to face risks. He pointed to increasing evidence of a global economic slowdown and suggested that uncertainty from Trump’s trade wars has contributed to it.
Reacting to the speech Friday, Trump, who has relentlessly attacked Powell and the Fed over its rate policies, kept up his verbal assaults on Twitter:
“As usual, the Fed did NOTHING!” Trump tweeted. “It is incredible that they can ‘speak’without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the US will do great.”
Trump added:
“My only question is, who is our bigger enemy, Jay Powel (sic) or Chairman Xi?“
Powell’s speech comes against the backdrop of a vulnerable economy, with the financial world seeking clarity on whether last month’s rate decision likely marked the start of a period of easier credit.
The confusion only heightened in the days leading to the Jackson Hole conference, at which Powell gave the keynote address. Minutes of the Fed’s July meeting released Wednesday showed that although officials voted 8-2 to cut their benchmark rate by a quarter-point, there was a wider divergence of opinion on the committee than the two dissenting votes against the rate cut had indicated.
The minutes showed that two Fed officials favored a more aggressive half-point rate cut, while some others adopted the polar opposite view: They felt the Fed shouldn’t cut rates at all.
The minutes depicted the rate cut as a “mid-cycle adjustment,” the phrase Powell had used at his news conference after the rate cut. That wording upset traders who interpreted the remark as suggesting that the Fed might not be preparing for a series of rate cuts to support an economy that’s struggling with a global slowdown and escalating uncertainty from President Donald Trump’s trade war with China.
There was even a difference of opinion among the Fed members who favored a rate cut, the minutes showed, with some concerned most about subpar inflation and others worried more about the threats to economic growth.
Comments Thursday from Fed officials gathering in Jackson Hole reflected the committee’s sharp divisions, including some reluctance to cut rates at least until the economic picture changes.
“I think we should stay here for a while and see how things play out,” said Patrick Harker, the president of the Fed’s Philadelphia regional bank.
Esther George, president of the Fed’s Kansas City regional bank and one of the dissenting votes in July, said, “While I see downside risk, I wasn’t ready to act on that relative to the performance of the economy.”
George said she saw some areas of strength, including very low unemployment and inflation now closer to the Fed’s target level. She said her decision on a possible future rate cut would depend on forthcoming data releases.
Robert Kaplan, president of the Fed’s Dallas branch indicated that he might be prepared to support further rate cuts.
If “we are seeing some weakness in manufacturing and global growth, then it may be good to take some action,” Kaplan said.
George was interviewed on Fox Business Network; Harker and Kaplan spoke on CNBC.
The CME Group, which tracks investor bets on central bank policy, is projecting the likelihood that the Fed will cut rates at least twice more before year’s end.
Adding to the pressures on the Fed, Trump has kept up his attacks on the central bank and on Powell personally, arguing that Fed officials have kept rates too high and should be cutting them aggressively.
Trump has argued that a full percentage-point rate reduction in coming months would be appropriate — a suggestion that most economists consider extravagantly excessive as well as an improper intrusion on the Fed’s political independence.
The president contends that lower rates in other countries have caused the dollar to rise in value and thereby hurt US export sales.
“Our Federal Reserve does not allow us to do what we must do,” Trump tweeted Thursday. “They put us at a disadvantage against our competition.”
Earlier in the week, he had told reporters, “If the Fed would do its job, you would see a burst of growth like you have never seen before.”
Powell has insisted that the White House criticism has had no effect on the Fed’s deliberations over interest rate policy.