APIKUR renews call for binding agreements to resume Kurdistan Region oil exports

BAGHDAD — The Association of the Petroleum Industry of Kurdistan reiterated calls for new binding agreements to restore Kurdish crude exports through the Iraq-Turkey pipeline, citing a need for clear payment guarantees and collaboration on budget law implementation. Iraq’s Ministry of Oil, however, rejected recent statements by the group as “misleading and inaccurate.”

“APIKUR member companies remain committed to the goal of restoring oil exports through the Iraq-Turkey pipeline,” Myles B. Caggins III, spokesperson for APIKUR, told 964media. “But as our member companies have said many, many, many times before, it is essential that we are reaching new agreements with the government of Iraq and Kurdistan Regional Government that include surety of payments.”

Pipeline exports have been suspended since March 2023 due to an arbitration ruling against Turkey’s facilitation of Kurdish oil exports without Baghdad’s consent. Before the shutdown, about 450,000 barrels per day were exported through the pipeline.

Caggins said oil companies must also participate in implementing Article 12 of the amended federal budget law, which governs oil payments and cost reimbursements.

“We want to participate in the implementation of Article 12 of the budget law and have a statement of work for the independent consultant that is agreed to by international oil companies and the KRG and the Ministry of Oil,” he said.

Article 12 of Iraq’s newly amended federal budget, passed Feb. 2, allocates $16 per barrel for production and transportation costs of foreign companies in the Kurdistan Region. APIKUR initially welcomed the amendment but insisted on formal agreements guaranteeing payment transparency and contractual protections before exports resume.

Caggins warned that without agreement on the consultant’s scope of work, results could alter existing contract terms.

“If the independent consultant makes some sort of numbers out of a methodology that is not agreed to by IOCs and the KRG, then they can say to the Ministry of Oil that based on our methodology that all three parties did not agree to, then here is what we see as the cost of production,” he said. “Or that work that they’re doing can never end, and we end up in this enduring $16 per barrel of production recoupment.”

He said the export halt has already cost over $24 billion in losses shared among oil companies, Iraq’s federal government, the KRG, and the public, adding that “foreign investors are concerned and wary that their contracts will not be honored inside of Iraq.”

“There needs to be a clear plan for how oil companies will receive the $1 billion that they are owed in past due payments,” he said. “Once those conditions are met, then we will very likely see the resumption of oil exports and stronger prosperity for all of Iraq.”

In a statement Friday, Iraq’s Ministry of Oil called APIKUR’s claims “misleading,” defending the federal government’s steps as lawful and transparent.

The ministry said it is implementing the amended budget law, which stipulates reimbursement of oil production and transport costs to the KRG. These costs will be calculated by an international consultancy whose figures will guide payments.

“The Government of Iraq has taken concrete and serious steps to demonstrate good faith in negotiations and to ensure the prompt and responsible resumption of oil exports,” the ministry said.

Prime Minister Mohammed Shia Al-Sudani previously warned against selling oil outside official channels, calling it a ‘violation of national rights’, and defended recent legal amendments aimed at transparency.

The ministry asserted obstacles come from “unrealistic and legally unfounded demands” contradicting previous agreements between international companies and the Kurdistan region. It called for an urgent meeting among all parties to negotiate under the amended budget law framework.

“The primary goal,” the ministry said, “is to resume exports through the pipeline immediately, securely, and lawfully, while upholding the rule of law and protecting national resources from unlawful exploitation.”

Efforts to resolve the impasse have intensified in recent months. On Feb. 17, Minister Abdul Ghani announced an arrangement with the KRG to maintain exports above 300,000 barrels per day. Acting Kurdistan Region Natural Resources Minister Kamal Mohammed Saleh said “all obstacles have been resolved” and indicated exports could resume soon pending legal procedures, but exports have not yet restarted.