ERBIL, Kurdistan Region - Oil producers in the Kurdistan Region on Monday welcomed the Iraqi parliament’s approval of a budget amendment that increases compensation for their production costs, a move seen as crucial for restarting oil exports through the Iraq-Turkey pipeline.
“APIKUR welcomes the Iraqi Council of Representatives Budget Law amendment, and remains focused on reaching agreements to restore oil exports through the Iraq-Türkiye Pipeline,” said Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR).
The Iraqi government proposed an amendment to the three-year federal budget law’s Article 12 in November. The lawmakers passed the bill on Sunday after months of discussions.
The law authorizes compensation to international oil companies (IOCs) operating in the Kurdistan Region for oil production and transportation costs, setting the rate at $16 per barrel, a substantial increase from the $6.90 set in the federal budget that was passed in June 2023.
In November, Caggins told Rudaw that the provision of a written agreement is a precondition for the restart of Kurdistan Region’s oil exports.
In late January, Iraqi Foreign Minister Fuad Hussein affirmed that the regional and federal government, along with international oil companies (IOCs), had reached a written agreement.
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 against Ankara, saying the latter had violated a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014.
Before the halt, Erbil exported around 400,000 barrels per day through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.
The KRG has struggled to pay the salaries of its civil servants on time and in full for a decade due to a financial crisis that further deteriorated after the oil export halt. Erbil is reliant on its local income and federal budget funds.
