Ernst and Young awarded KRG oil audit deal

Ernst and Young awarded KRG oil audit deal
The Kurdistan Regional Government has signed a deal with UK's Ernst and Young to audit the region’s oil and gas reserves.
2 min read
01 December, 2016
A worker monitors pressure levels at the Kar Refinery in Erbil, Iraq [Getty]
The Kurdistan Regional Government (KRG) has signed a deal with Ernst and Young, the multinational professional services firm based in the UK, to audit the region’s oil and gas reserves.

KRG Prime Minister Nechirvan Barzani has since expressed hope that the agreement would help ensure transparency, described as his government’s “top priority”.

“The agreement will further strengthen the transparent and independent auditing process for the oil and gas sector,” Barzani said, in a statement released on Wednesday after senior KRG officials met to sign the agreement with the head of the British Consulate General in the Kurdistan region in Erbil.

The KRG signed a similar agreement with Deloitte in October which will see the professional and financial services company – the largest in the world – conduct an audit of the KRG’s oil production, exportation, and revenues.

In an attempt to ensure transparency no report issued by the Ministry of Natural Resources, based on Deloitte research, will be published without first being reviewed by the firm.

The KRG is estimated to have a total of 45 billion gallons in oil reserves, nearly a third of Iraq’s total 150 billion capacity.

This reserve figure would place the KRG 10th in the world for largest petrol reserves if the autonomous region was classified as a nation state.

This year Kurdish authorities have quarrelled with Baghdad over oil exports stating this summer that the KRG would be willing to strike a deal with the Iraqi central government to increase oil exports only if it guarantees the region revenues of $1 billion per month, double the existing arrangement.

As a plethora of Iraqi forces – including the Iraqi army, Kurdish Peshmerga, and Shia Hashd al-Shaabi – participate in the ongoing battle to liberate Mosul from Islamic State militants, concerns have been raised that rivalries could lead to attempted land grabs of territories previously under the extremist group’s controls, with the lucrative oil fields of Kirkuk providing one case in point.

On Thursday Iraq’s oil ministry said in a statement that oil exports for November had reached a record high of 4.051 million barrels per day. However, in agreement with a deal signed with OPEC on Wednesday, the country is set to cut oil production levels in 2017 by up to 210,000 barrels per day.