ERBIL, Kurdistan Region - Iraq’s oil minister on Wednesday said that Baghdad and Erbil will reach a final agreement on the exportation of Kurdistan Region’s crude oil to global markets within two weeks, adding that there are “positive indicators” in this regard.
“Regarding the agreement with the Region, we have reached the final stage and hopefully we will reach the final agreement on the exportation of crude oil within a maximum of two weeks,” Hayyan Abdul Ghani said during the Iraq Forum on Wednesday.
He added that they have agreed on all points except for how to deal with the Region’s bank account in which the Kurdish government’s oil income is kept.
“All indicators are positive and hopefully we will reach an agreement,” he noted.
Tension between Erbil and Baghdad has been high since the Iraqi Federal Supreme Court in February last year 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 International Chamber of Commerce (ICC) on March 23 ruled in favor of Iraq against Turkey regarding exports of Kurdistan Region oil through Turkey’s Ceyhan port, saying Ankara had breached a 1973 pipeline agreement that obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq.
The exportation of the Kurdistan Region’s oil to Turkey has been suspended since then.
Erbil and Baghdad signed a temporary agreement early last month for the exportation of the Kurdish oil but Turkey has not agreed to resume the reception of Kurdistan Region’s oil.
The KRG exported some 400,000 barrels of crude per day to global markets through Turkey. The Iraqi government also exported about 75,000 barrels of Kirkuk oil per day through the same pipeline.
“We received news from the Turkish side that they are testing the pipelines. We do not reject the tests because it is in our interest if the oil exportation resumes,” said the Iraqi oil minister on Wednesday, adding that Turkey claims that the February quakes have harmed the pipelines which export oil from the Region.
Investment in Iraq
UAE-based Crescent Petroleum’s executive director for exploration and production, Abdulla al-Qadi, spoke at the same panel, entitled "Iraq’s Energy Sector: Key Challenges & Future Strategies," at the Iraqi Forum where the Iraqi oil minister spoke.
He said that the rights of investors should be preserved in Iraq.
“Laws and regulations must guarantee the rights of the contractor and must be fixed and not subject to interpretation or modification. In terms of investment offerings, we are talking about long-term investment in the field of oil and gas for 20-30 years,” said Qadi.
He also said that the investors should be treated by the government as ‘partners” rather than “contractors.”
Crescent Petroleum and its affiliate, Dana Gas, work in the Kurdistan Region’s gas sector.
Attending an investment conference in Baghdad on Wednesday, Iraqi Prime Minister Mohammed Shia' al-Sudani urged all investors to "take advantage of the available investment opportunities and emphasized the government's serious commitment to diversifying the economy by activating other sectors, particularly agriculture, and industry, to support economic growth."
"While we seek to attract investment, we are committed to ensuring that the privatization process does not have negative social or political effects and will not impose undue burdens on investors regarding employment obligations," he added.
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