October 29, 1915
ERBIL, Kurdistan Region- Iraq's Minister of Finance Hoshiyar Zebari told the Reuters news agency on Wednesday that restarting the oil-sharing agreement between Baghdad and Erbil was vital for the 2016 national budget, expressing hope that a delegation from the Kurdistan Regional Government (KRG) would help reach an agreement.
"If we can get the KRG-Baghdad oil [agreement] reinstated again and both sides to implement it in good faith, I think we can succeed this year," Zebari said in an interview for the Reuters Middle East Investment Summit.
The Reuters report said "Iraq's national budget proposal for 2016 envisages expenditure of about $95 billion with a nearly $21 billion deficit; that compares with original projections for this year of roughly $105 billion of spending and a $22 billion deficit. Oil accounts for over 80 percent of Iraq's fiscal revenues, but crude prices have more than halved since mid-2014."
But Zebari praised the government's effort to rein in spending and said only 60 percent of the 2015 budget would be spent by year's end.
"We've really imposed very stringent controls over all the ministries and the government departments in order to overcome this crisis."
The stalled oil agreement has been a burden on the finances of both Baghdad and Erbil. The deal stated that the KRG would transfer up to 550,00 barrels per day to Iraq's state oil company in exchange for 17 percent of the overall Iraqi budget.
The KRG stopped its transfers in June claiming Baghdad had not handed over the earmarked portion of the budget and has sought independent sales through Turkey.
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