ERBIL, Kurdistan Region - An association of oil producers operating in the Kurdistan Region stated on Thursday that any resumption of Kurdish oil exports must be contingent upon guarantees from both Erbil and Baghdad for export payments, as well as adherence to commercial terms outlined in contracts with the Kurdistan Regional Government (KRG).
The Association of the Petroleum Industry of Kurdistan’s (APIKUR), an umbrella group of eight international oil firms, is ready to “finalize the agreements needed to resume oil exports,” said the oil association’s spokesman Myles Caggins in a statement. He emphasized that “the commercial terms and economic model of our [production sharing contracts] PSCs must be upheld,” stressing that the member companies’ existing contracts remain legally valid.
APIKUR also highlighted the necessity of formal sales and lifting agreements for future oil exports, in addition to written guarantees for the payment of “oil delivered but not paid between October 2022 and March 2023.” Payments must be made “directly and transparently” to the companies without intermediaries or undue delays, the association added.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline were halted in March 2023 following a ruling by a Paris-based arbitration court in favor of Baghdad, which claimed Ankara had violated a 1973 pipeline agreement by permitting Erbil to independently export oil starting in 2014.
The Iraqi parliament in early February approved amendments to the federal budget law, which authorized a $16 per barrel production and transport fees for Erbil and international oil companies (IOCs) operating in the Kurdistan Region. This move is seen as crucial to restarting Kurdish oil exports.
The amendments also stipulated that the Iraqi federal government and the KRG must establish an international technical consultant body within 60 days to assess production and transportation costs for oil fields in the Kurdistan Region. If no agreement is reached, the federal council of ministers will appoint the body.
APIKUR stated on Thursday that “the work scope of an independent technical consultant, as required by the revised budget law, should be agreed upon by all parties and strictly limited to verifying that oil sales invoices align with PSCs terms.” The association added that it has already recommended consultants to KRG officials from renowned “independent international firms.”
“The international consultant will review the documents, financial records, and contracts from each oil company, and provide a true cost,” Caggins told Rudaw on Thursday, stressing the need for a clear mandate to avoid unnecessary delays.
APIKUR’s remarks notably come amid growing uncertainty and cautious optimism about the potential resumption of Kurdish oil exports. In its statement, the association expressed readiness to activate the Iraq-Turkey pipeline used to transfer Kurdish oil, but added that “additional meetings” are needed to finalize the agreements.
Despite US pressure, negotiations between Iraqi and Kurdish officials, as well as IOCs, have yet to yield concrete results.
A meeting between Iraqi and Kurdish officials, along with IOCs, was held in Baghdad on Thursday, but ended without any agreements, according to one of the attendees, who spoke to Rudaw English on the condition of anonymity.
“Nothing [was] achieved and there was no breakthrough,” the source said, adding that the participants “agreed to form two committees between Erbil and Baghdad to address urgent issues, including debts, assurances of payment, and the scope of the third party consultant.”
The Iraqi oil ministry had initially invited the KRG’s natural resources ministry and APIKUR for a meeting in Baghdad on Tuesday. However, the meeting did occur as planned, and instead, unscheduled meetings were held on Saturday and Thursday.
Importantly, a senior US diplomat attended Thursday’s meeting as Washington is intensifying its pressure on Baghdad to quickly resume Kurdish oil exports, according to the well-placed source.
