IRAQ
By Charles Kennedy - Nov 20, 2024, 3:00 AM CST
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Crude oil flows from Kurdistan could return to the market next year, after the Kurdistan regional government and the central Iraqi government in Baghdad agreed a new production sharing agreement that satisfies both sides.
“Previously, the KRG signed several agreements with the federal government regarding oil exports. However, the Iraqi budget law set oil extraction and transportation costs at $6 per barrel, which became a major obstacle to oil exports,” the acting minister of natural resources for the Kurdistan semi-autonomous region told local media publication Kurdistan 24.
Following the negotiations, the extraction and transportation costs were revised up to $20.6 per barrel, of which $16 per barrel would go to companies active in Kurdistan in the first phase of the new agreement, Kamal Mohammad Salih told the publication.
Deliveries of Kurdish crude oil have been suspended for over a year amid a dispute between the central government in Baghdad and Turkey over who had the power to authorize these deliveries.
The impasse followed an International Chamber of Commerce ruling from March 2023. The ICC ruled in favor of Iraq, which had argued that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq.
The original dispute then morphed into the long-running debate between Erbil and Baghdad about how to divide the oil profits between the central Iraqi government and the government of the semi-autonomous oil-rich region.
The latest report out of Kurdistan suggests this may have finally been concluded with a mutually beneficial agreement that features the stipulation for an independent audit the oil extraction and transportation costs for Kurdish oil. “The firm will be given 60 days to determine the actual costs following the budget law amendment,” Salih explained.
Iraq is OPEC’s second-largest oil producer after Saudi Arabia. A solid chunk of its total comes from the fields in the northern Kurdistan region.
By Charles Kennedy for Oilprice.com
Crude oil flows from Kurdistan could return to the market next year, after the Kurdistan regional government and the central Iraqi government in Baghdad agreed a new production sharing agreement that satisfies both sides.
“Previously, the KRG signed several agreements with the federal government regarding oil exports. However, the Iraqi budget law set oil extraction and transportation costs at $6 per barrel, which became a major obstacle to oil exports,” the acting minister of natural resources for the Kurdistan semi-autonomous region told local media publication Kurdistan 24.
Following the negotiations, the extraction and transportation costs were revised up to $20.6 per barrel, of which $16 per barrel would go to companies active in Kurdistan in the first phase of the new agreement, Kamal Mohammad Salih told the publication.
Deliveries of Kurdish crude oil have been suspended for over a year amid a dispute between the central government in Baghdad and Turkey over who had the power to authorize these deliveries.
The impasse followed an International Chamber of Commerce ruling from March 2023. The ICC ruled in favor of Iraq, which had argued that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq.
The original dispute then morphed into the long-running debate between Erbil and Baghdad about how to divide the oil profits between the central Iraqi government and the government of the semi-autonomous oil-rich region.
The latest report out of Kurdistan suggests this may have finally been concluded with a mutually beneficial agreement that features the stipulation for an independent audit the oil extraction and transportation costs for Kurdish oil. “The firm will be given 60 days to determine the actual costs following the budget law amendment,” Salih explained.
Iraq is OPEC’s second-largest oil producer after Saudi Arabia. A solid chunk of its total comes from the fields in the northern Kurdistan region.
By Charles Kennedy for Oilprice.com
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