ERBIL, Kurdistan Region - There is still no agreement to restore operation of the Iraq-Turkey pipeline and resume exporting Kurdish crude to global markets, a spokesperson for an association of oil producers in the Kurdistan Region said on Saturday, estimating that about $19 billion has been lost because of the halt.
“There is not currently an agreement for the restoration of oil flow through the Iraq pipeline, but this remains a priority for the APIKUR member companies,” Myles B. Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told Rudaw in a televised interview.
“We are in close relation and in talks with the Kurdistan Regional Government and the ministry of natural resources and it is our goal to have the oil back through the pipeline as soon as possible,” he added.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023 when a Paris-based arbitration court ruled in favor of Baghdad that Ankara had breached a 1973 agreement by allowing Erbil to begin independent oil exports in 2014.
Before the halt, around 400,000 barrels a day were being exported by Erbil through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.
According to Caggins, “there has been more than $19 billion in losses to all of the people of Iraq.”
Despite several rounds of talks between Kurdish, Iraqi, and Turkish officials, the exports have yet to resume and many international oil companies have suspended production.
Baghdad, Erbil and the international oil companies held a meeting in Baghdad on June 9 with the goal of resolving all remaining obstacles, but issued no joint statement.
Issues around contracts with the oil producers is the main sticking point. In March, the Iraqi oil ministry said that in accordance with the federal budget, the average cost for producing one barrel of oil is $6.90, while producers operating in the Kurdistan Region are asking for three times that amount, as well as repayment of billions of dollars of debts that the ministry said are “unknown to the federal government.”
Caggins said that APIKUR members “want to have discussions about modifications of contracts, and any modification to those contracts must include a guarantee for past due payments, and also a guarantee for how future payments would happen,” adding that they are looking for surety of payments and that any changes to the contracts must be agreed to by the Kurdistan Regional Government (KRG) as well as the federal government.
Oil producers want Baghdad to take leadership to resolve the situation, according to Caggins.
“What we want from Baghdad is for Baghdad to take leadership on this issue and we want Baghdad to follow through with the promises made during Prime Minister [Mohammed Shia’ al-] Sudani’s meeting with President [Joe] Biden at the White House,” he said.
Sudani visited the United States in April. He and Biden “affirmed the importance of ensuring Iraqi oil can reach international markets and expressed their desire to reopen the Iraq-Turkiye Pipeline,” according to a joint statement released following their meeting.
Kamal Mohammed, the KRG’s acting natural resources minister, said on June 6 that oil companies operating in the Kurdistan Region “have invested large amounts of money in the Region’s oil fields and Baghdad should take this into consideration."
“The main obstacle before the resumption of Kurdistan Region’s oil is that the Iraqi oil ministry says the production cost is too much. The reason behind that is that the companies invested in the oil sector. However, Iraq spends trillions of dinar annually in the oil sector. Therefore, the management of the oil sector in Iraq and the Kurdistan Region are different: the sector is general in Iraq while it is private in the Region,” he explained.
Iraq has been working to bring the Kirkuk-Ceyhan pipeline back online, making repairs to damage sustained during the war with the Islamic State (ISIS). This would provide a second export route to Turkey’s Ceyhan port.
“There is not currently an agreement for the restoration of oil flow through the Iraq pipeline, but this remains a priority for the APIKUR member companies,” Myles B. Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told Rudaw in a televised interview.
“We are in close relation and in talks with the Kurdistan Regional Government and the ministry of natural resources and it is our goal to have the oil back through the pipeline as soon as possible,” he added.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023 when a Paris-based arbitration court ruled in favor of Baghdad that Ankara had breached a 1973 agreement by allowing Erbil to begin independent oil exports in 2014.
Before the halt, around 400,000 barrels a day were being exported by Erbil through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.
According to Caggins, “there has been more than $19 billion in losses to all of the people of Iraq.”
Despite several rounds of talks between Kurdish, Iraqi, and Turkish officials, the exports have yet to resume and many international oil companies have suspended production.
Baghdad, Erbil and the international oil companies held a meeting in Baghdad on June 9 with the goal of resolving all remaining obstacles, but issued no joint statement.
Issues around contracts with the oil producers is the main sticking point. In March, the Iraqi oil ministry said that in accordance with the federal budget, the average cost for producing one barrel of oil is $6.90, while producers operating in the Kurdistan Region are asking for three times that amount, as well as repayment of billions of dollars of debts that the ministry said are “unknown to the federal government.”
Caggins said that APIKUR members “want to have discussions about modifications of contracts, and any modification to those contracts must include a guarantee for past due payments, and also a guarantee for how future payments would happen,” adding that they are looking for surety of payments and that any changes to the contracts must be agreed to by the Kurdistan Regional Government (KRG) as well as the federal government.
Oil producers want Baghdad to take leadership to resolve the situation, according to Caggins.
“What we want from Baghdad is for Baghdad to take leadership on this issue and we want Baghdad to follow through with the promises made during Prime Minister [Mohammed Shia’ al-] Sudani’s meeting with President [Joe] Biden at the White House,” he said.
Sudani visited the United States in April. He and Biden “affirmed the importance of ensuring Iraqi oil can reach international markets and expressed their desire to reopen the Iraq-Turkiye Pipeline,” according to a joint statement released following their meeting.
Kamal Mohammed, the KRG’s acting natural resources minister, said on June 6 that oil companies operating in the Kurdistan Region “have invested large amounts of money in the Region’s oil fields and Baghdad should take this into consideration."
“The main obstacle before the resumption of Kurdistan Region’s oil is that the Iraqi oil ministry says the production cost is too much. The reason behind that is that the companies invested in the oil sector. However, Iraq spends trillions of dinar annually in the oil sector. Therefore, the management of the oil sector in Iraq and the Kurdistan Region are different: the sector is general in Iraq while it is private in the Region,” he explained.
Iraq has been working to bring the Kirkuk-Ceyhan pipeline back online, making repairs to damage sustained during the war with the Islamic State (ISIS). This would provide a second export route to Turkey’s Ceyhan port.
