KRG holds meeting with oil companies

ERBIL — The Kurdistan Regional Government (KRG) convened a meeting with all oil companies operating in the autonomous region at the Council of Ministers.

Key KRG figures, including Acting Minister of Natural Resources Kamal Mohammed, Secretary of the Council of Ministers Amanj Rahim, Justice Minister Firsat Ahmad, and Head of Coordination and Follow-up Department Abdulhakim Khasro, attended the meeting.

According to Umed Sabah, a representative from the KRG Prime Minister’s office, the discussions centered on KRG’s ongoing support for the oil companies, updates on recent visits and negotiations by the Kurdistan delegation in Baghdad, implementation of the Iraqi budget law, and the production costs of oil companies.

Sabah said the meeting participants agreed to sustain negotiations between the Kurdish and Iraqi governments to seek a resolution within the framework of the Iraqi constitution and the budget law. Additionally, discussions addressed the draft of the federal oil and gas law, with the Kurdistan government team presenting their evaluation of the draft and examining proposals from the Iraqi government.

The Iraq-Turkey oil pipeline, crucial for exporting 1.4 million barrels of oil per day, has remained inactive since March 25, 2023, resulting in around $14 billion in financial losses for Iraq and the KRG. Before its suspension, the pipeline exported approximately 450,000 barrels per day, mainly from Kurdish oil fields, considerably below its maximum capacity.

Expectations arose prior to Turkish President Recep Tayyip Erdogan’s recent visit to Iraq that an agreement might be reached during meetings between Turkish, Iraqi, and KRG officials to resume Kurdish oil exports. However, Iraqi government spokesperson Basim Al-Awadi told local media that reaching such an agreement would require time, attributing the delay to the production costs for oil companies operating in Kurdistan. Baghdad insists on paying foreign oil companies in Kurdistan approximately $6 per barrel for extracted oil, while the companies demand around $20 per barrel.

In response, the KRG Ministry of Natural Resources released a statement on April 23 refuting claims that the breakdown of talks was the KRG’s fault. The ministry rebutted Iraqi assertions that Baghdad’s refusal of KRG oil contracts stemmed from their alleged unconstitutionality, asserting that there was no provision in the Iraqi constitution mandating the Iraqi government’s approval of such contracts.

Previously, Baghdad attributed the delay in resuming KRG oil exports to technical issues on the Turkish side of the pipeline. However, the Turkish Energy Ministry clarified that there were no technical issues with the pipeline, and it had been operational since October 4, 2023.

Despite Turkey’s readiness to resume oil exports and the operational status of the pipeline, the Iraqi government has yet to prepare for the resumption of operations through the pipeline.