New KRG oil minister unlikely to end spat with Baghdad over oil, revenue
The appointment of a new natural resources minister by Iraq's semi-autonomous Kurdistan Regional Government is unlikely to end a spat with Baghdad over oil sales and sharing of federal budget revenue that has impacted its compliance with it OPEC+ oil quota.

The KRG has appointed Kamal Atroshi, an oil and gas adviser to Prime Minister Masrour Barzani since he rose to power in July 2019, as its new natural resources minister, a post that had been vacant for around a year and a half.

Atroshi, who has 35 years of oil geophysics experience, started his career working in now-defunct Iraq National Oil Co. and then moved into various positions including stints at Total and Malaysia's Petronas.

The key issue facing Atroshi will be negotiating with the federal government Kurdistan's share of the 2021 fiscal budget and the transfer some of their oil to Baghdad in return for revenue sharing.

Kurdistan's share of the budget is a point of contention with the federal government, which wants Erbil to stick to a previous agreement to receive revenue in exchange for Kurdish oil.

Kurdistan has its own agreements with international oil companies and markets and sells its own oil, while Baghdad's State Oil Marketing Organization handles federal crude and has its own different model of contracts with IOCs.

Atroshi's appointment "will make little difference to ongoing negotiations over the KRG's rights and obligations under the draft 2021 federal budget that largely remain mired in the same underlying dynamics that have played out over the last 13 years: these issues will remain in the hands of the KRG's senior political leadership," said Patrick Osgood, senior Iraq analyst at Control Risks.

Disagreements between the federal government and the KRG have hindered OPEC's second-largest producer from complying with its OPEC+ quota.

Federal government officials, including deputy prime minister Ali Allawi and oil minister Ihsan Ismaael, have said previously that the KRG was not complying with the OPEC+ production cap, forcing Baghdad to compensate for Kurdish overproduction, a charge that has often been denied by the KRG.

Iraq's lax compliance, among the worst in OPEC+ in 2020, has complicated the coalition's efforts to balance an oil market suffering from anemic demand outlook.

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