ERBIL, Kurdistan Region - Kurdistan Region’s long-suspended oil exports could be resumed later this year if the Iraqi parliament passes an amendment proposed by the federal government, Iraq’s foreign minister said on Thursday. Last week, the Iraqi government approved a proposal to amend articles from the federal budget to authorize compensation to companies operating in the Kurdistan Region for oil production and transportation costs, setting the rate at $16 per barrel. The proposal - yet to be finalized by parliament - aims to resume oil exports from the Region. “We have sent this decision to the parliament because it falls under the budget law and we hope that the legislature will vote on it in these days,” Iraqi Foreign Minister Fuad Hussein told Rudaw’s Sangar Abdalrahman on the sidelines of the COP29 climate summit in Baku, Azerbaijan. “If it [parliament] passes it [the amendment], the Kurdistan Region will be able to export oil… before the New Year,” the minister explained. Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been suspended since March 2023 after a ruling by a Paris-based arbitration court ruled in favor of Baghdad over Ankara, saying the latter had breached a 1973 pipeline agreement by allowing Erbil to export oil independently since 2014. Hussein also mentioned that there are ongoing talks with Ankara over the issue. The Association of the Petroleum Industry of Kurdistan (APIKUR), an umbrella group for international oil companies operating in the Kurdistan Region, on Thursday welcomed the proposal introduced by Baghdad. Iraq’s three-year federal budget bill, passed in June 2023, had set the rate for one barrel of oil at $6.90 and international oil companies (IOCs) have requested three times that amount. 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 signed production-sharing contracts with international oil companies when it began its independent oil sector. Under this model, the oil companies cover the entire cost of production while the KRG receives the lion’s share of the profits from successful projects. Baghdad has repeatedly said that these contracts violate the constitution and must be amended to match the service contracts that the federal government prefers before exports can resume. There have been international calls for the resumption of Kurdish oil, with the US saying an end to the halt is “mutually beneficial” to all parties.
