ERBIL, Kurdistan Region - Iraq's state-owned company responsible for marketing its oil to global markets, has informed international companies to no longer purchase crude oil from the Kurdistan Region, the company’s director told Iraqi state media on Monday.
Iraq’s State Organization for Marketing of Oil's (SOMO) director also stated that Erbil is obliged to apply the Supreme Court’s decision outlawing the Region’s oil and gas law.
The Iraqi Federal Supreme Court in February deemed the Kurdistan Region’s oil and gas law “unconstitutional”, hence striking the independence of the Region’s energy sector and jeopardizing its industry. The Kurdistan Regional Government (KRG) has repeatedly challenged the constitutionality of the court’s ruling.
“The oil marketing company [SOMO] has taken the marketing measures and the international oil companies have been informed not to buy crude oil from the Region,” Alaa al-Yasiri, the director of SOMO, told Iraqi state media on Monday.
The Iraqi oil ministry said in a statement in July that US energy giants Schlumberger, Baker Hughes, and Halliburton have confirmed that they will no longer be applying to new projects in the Kurdistan Region, in compliance with the Supreme Court’s decision.
Yasiri stated that the court’s ruling has annulled all of the Kurdistan Region’s oil extraction and export contracts with the IOCs, and mechanisms have been laid out by the Iraqi oil ministry to transfer the files to the federal government, but the efforts “have not been welcomed” by Erbil.
According to Yasiri, the Kurdistan Region’s daily export rate of 2022 has increased from 355 thousand barrels compared to 420 thousand in 2021.
The KRG’s quarterly report audited by Deloitte revealed that the Region had exported over 36 million barrels of oil from January 1 to March 31 of 2022, at an average price of $86.7 per barrel.
The KRG reported a total net income of over 3.9 billion dollars throughout 2021, having exported over 152 million barrels of oil.
Updated at 1:20pm
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