WASHINGTON DC - International companies operating in the Kurdistan Region reiterated on Monday that they will not resume the Region's oil exports unless provided written agreements by the federal government. Iraqi officials have said the process could be resumed soon despite differences.
Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told Rudaw that oil producers have "always maintained a position that we must have written agreements that will define the responsibilities and the payment method for exporting oil through the Iraq-Turkey Pipeline."
"There have been ongoing discussions behind the scenes. Out of the public eye, these discussions have been between the Kurdistan Regional Government, the Government of Iraq, and some of our member companies. And these meetings are leading to agreements that will make it very clear for how companies will be paid for past payments and future payments, and we want to ensure that all parties are aware of their responsibilities for exports of oil," he added.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023, when 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 exporting oil independently in 2014.
The suspension has caused about $30 billion loss in revenue to all parties so far "to all parties", according to Caggins.
The head of Iraq’s State Oil Marketing Organization (SOMO) said on Monday that they are “working to implement the agreed-upon terms” to resume the Kurdistan Region’s long-halted oil exports, with exports expected to restart “soon.”
The following is the full transcription of the interview with Myles Caggins:
Rudaw: What is the latest update on your discussions with the Iraqi government and the KRG about resuming Kurdistan Region’s oil exports?
Myles Caggins: The APIKUR has always maintained a position that we must have written agreements that will define the responsibilities and the payment method for exporting oil through the Iraq-Turkey Pipeline. There have been ongoing discussions behind the scenes. Out of the public eye, these discussions have been between the Kurdistan Regional Government, the Government of Iraq, and some of our member companies. And these meetings are leading to agreements that will make it very clear for how companies will be paid for past payments and future payments, and we want to ensure that all parties are aware of their responsibilities for exports of oil.
So we've heard from the Iraqi officials that they put some blame on companies. So who do you blame for not getting an agreement about resuming the oil exports to the Ceyhan port?
APIKUR member companies are focused on solutions, and we think these solutions will happen when all sides are continuing to talk, and when the prime minister of Iraq and the Iraqi Government carry through with their goal to have exports resume through the Iraq-Turkey Pipeline. This will benefit all people of Iraq, from the South to the North, and Iraq will have more revenue coming in to its government, as well as two points to export oil. Of course, they're in the south, oil is exported through the Arabian Gulf. And in the north, you can have oil exported through Turkey to the Mediterranean Sea.
So we've seen this administration. They are putting a lot of pressure on Baghdad, on KRG as well, urging both governments to resume oil exports, but we haven't seen that yet. How do you see the US or the Trump administration's engagement and role in pushing both Baghdad and Erbil and helping you to get together and resolve these issues that have been there for years.
The Trump administration and previously, the Biden administration have been very vocal in supporting the push for the Iraq-Turkey Pipeline to be reopened. The pipeline has been closed [for] more than two and a half years now. There has been about $30 billion lost to all parties. So it's time that the pipeline is reopened. And we have seen dialog as recently as this week between the new d'affaires of the US Embassy in Baghdad as well with Prime Minister Sudani. And we know that oil exports and reopening the pipeline is at the top of the agenda. And it's at the top of the agenda because it will help all Iraqis. It will solve the budgetary problems with salaries between the KRG and Baghdad and the APIKUR member companies are here in Iraq and working in [the] Kurdistan Region to make a difference, to make a benefit for all stakeholders, and most importantly, the people of Iraq.
As discussions are ongoing, I don't want to jeopardize your discussions with Iraq and with the KRG. But do you see any lights at the end of this tunnel? Do you have any optimism, or do you have any hope that you will get somewhere with your current discussions, or will it be the same as we have seen in the last few discussions?
Well, our companies remain focused on their investments. We remain focused on getting the pipeline reopened and each company, each individual company, will make a decision related to oil exports, but we know when the pipeline is open, it gives more options for the companies, and of course, will benefit all of the people of Iraq. The companies came to Iraq and [the] Kurdistan Region about 20 years ago, and since that time, they have invested more than $10 billion and have made a significant difference. And we want to have that 0.5% of the world's oil going back through the pipeline. This oil comes from the North Oil Company in Kirkuk, as well as the companies operating in [the] Kurdistan region. So we just need to get the pipeline open, and we must have written agreements before we put oil into the pipeline.
Is that the only condition that you have ‘’a written agreement’’, or do you have other conditions in order to put the oil into the pipeline?
All proper business is done with written agreements. We are not asking for anything different than any of the companies that are working in Federal Iraq, but I do want to explain something for your viewers and those of you who follow this close issue closely: these are new agreements. So, imagine this. These agreements are dealing with contracts between the international oil companies and the KRG. Those contracts must be respected by the central government and Ministry of oil and SOMO, the central government, federal government of Iraq, is directing the policy of oil exports and sales and marketing through SOMO, and that oil is going through a pipeline that is owned by Turkey out to Ceyhan oil terminal in the Mediterranean Sea. So it's a complex agreement. These are new agreements, and it takes time to make sure that these agreements protect the rights of companies, that their agreements honor our economic terms, and that there is an opportunity for arbitration if there's any confusion or disputes that arise in the future.
We have heard that the SOMO says the issue of exporting oil is related to the Iraqi budget Law. Do you agree?
The agreements that we're seeking and working on are totally inclusive of the budget law. In fact, the budget law has provided an opportunity to get the pipeline reopened and the APIKUR member companies operate within the laws of Iraq and Kurdistan Region.
