KRG says it met obligations on oil export deal, awaits Baghdad’s response

ERBIL — The Kurdistan Regional Government’s Ministry of Natural Resources said Wednesday it has fully met its obligations under cabinet decisions for resuming crude exports in coordination with the federal Oil Ministry.

In a statement, the ministry said it had informed all domestic and foreign companies about the arrangements, noting that only one foreign operator has yet to approve. “This does not affect the tripartite agreement between our ministry, the companies, and the federal Oil Ministry,” it said.

The ministry added, “Our ministry and the companies sent written approval on the 23rd of this month to the federal Oil Ministry, and we are waiting for the ministry to respond and sign the agreement so that SOMO can start exporting the region’s oil as soon as possible and implement the terms of the agreement.”

On Tuesday, Iraq’s state oil marketer SOMO said Baghdad and Erbil were close to finalizing an agreement. SOMO Director Ali Nizar said “the agreement has reached final stages” and that international companies had been given assurances on payments. He added the government would announce the export restart date soon after the official signing.

Oil exports from the Kurdistan Region have been suspended since March 25, 2023, when Turkey shut the Iraq–Turkey pipeline after an arbitration ruling in Paris sided with Baghdad. The International Chamber of Commerce tribunal found Ankara had violated a 1973 pipeline agreement by allowing the KRG to independently export oil without federal approval.

The halt has cost both Baghdad and Erbil billions of dollars in lost revenue and forced international oil companies in the Kurdistan Region to scale back or suspend activity.

The Association of the Petroleum Industry of Kurdistan said in July its members were ready to resume exports once written agreements guaranteed payment of arrears and future sales under existing contracts. Norwegian oil operator DNO, the region’s largest producer, said this week it welcomed progress but would only restart under terms that ensure payment security.

Oil Minister Hayan Abdul Ghani has said Baghdad and Ankara are ready to reopen the pipeline but that disagreements remain over the Kurdistan Region’s internal consumption quota. Baghdad has proposed a ceiling of 46,000 barrels per day, while the KRG has sought 65,000. He also said Baghdad suggested a $16-per-barrel payment mechanism and the appointment of an independent auditor to verify costs.