ERBIL, Kurdistan Region - Iraqi Prime Minister Mohammed Shia’ al-Sudani told Turkey that Baghdad needs more time to reach an agreement with oil companies about restarting Kurdistan Region’s oil exports, Turkish Energy Minister Alparslan Bayraktar said on Thursday.
“Talks continue between Baghdad and Erbil. They have yet to reach an agreement. According to the information we received from Mr. Sudani and his delegation today, they still need time,” Bayraktar told the Turkish broadcaster CNN Turk following Sudani’s meeting with Turkish President Recep Tayyip Erdogan in Ankara.
Erdogan and Sudani signed several memoranda of understanding aimed at boosting trade, investment, and shared economic interests during the Iraqi leader’s visit.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023 after a Paris-based arbitration court ruled in favor of Baghdad that Ankara violated a 1973 pipeline agreement by allowing Erbil to export oil independently.
Despite months of talks between Erbil, Baghdad, Ankara, and oil producers - with added pressure from the United States - the exports remain suspended, costing Iraq billions of dollars in lost revenue.
Bayraktar said the Iraq-Turkey pipeline has the capacity to carry 1.5 million barrels of oil per day and that Ankara is interested in expanding oil and gas trade with Iraq, especially in Basra.
"Iraq is our most natural partner. They are a partner with whom we can and do cooperate in every field. We are looking at three issues regarding energy. One is oil production. Another is our export of natural gas to power plants in Iraq. We also have significant cooperation regarding electricity, which we will increase further,” he told CNN Turk.
The sticking points in negotiations on the oil exports are fees paid to oil producers and appointment of an international consultant.
In early February, the Iraqi parliament approved amendments to the federal budget law, authorizing a $16-per-barrel fee for production and transport costs in the Kurdistan Region. The amendments also require the federal government and the Kurdistan Regional Government (KRG) to establish an international technical consultancy within 60 days to assess production and transportation costs for oil fields in the Kurdistan Region. If they do not reach an agreement, the federal council of ministers will appoint the consultant.
The spokesperson for the international oil companies operating in the Kurdistan Region told Rudaw on April 29 that Baghdad must provide written documentation of the international consultant’s audit of production and costs.
"We have been very clear. We have stated publicly, we have stated privately what our conditions are for resuming oil exports. And now is the time for the government of Iraq to share their view and produce written statements of work for the international consultant. And as soon as we have those agreements written, we will be ready to resume oil exports," said Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR).
