ERBIL, Kurdistan Region - The recent suspension of the Kurdistan Region’s oil exports has significantly impacted the foreign investment in the Region and a further delay in the resumption of the process could threaten thousands of jobs in the energy sector, warned an association on Tuesday.
Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline after a Paris arbitration court on March 23 ruled in favor of Baghdad, saying Ankara had breached a 1973 pipeline agreement when it allowed the Kurdistan Region to begin independent oil exports in 2014. Despite several talks between the Kurdish, Iraqi and Turkish officials, the oil export has not resumed.
The Association of the Petroleum Industry of Kurdistan (APIKUR), which includes international oil and gas companies that are directly or indirectly involved in the production of the Kurdish oil, warned on Tuesday that the foreign investment in the Region is being severely affected since the flow of the oil to the international markets halted four months ago.
“The ongoing closure is having a significant impact on foreign investment in Kurdistan, and a prolonged closure threatens thousands of jobs in the region,” said the association in a statement.
“To date, APIKUR member companies, which include DNO, Genel Energy, Gulf Keystone Petroleum, HKN Energy and ShaMaran Petroleum, have reduced spending plans in the region by some $400 million in 2023, with 2024 spending plans under review,” it added, noting that “our Member companies have already had to take steps to cut costs, which have resulted in hundreds of personnel layoffs.”
Before the halt, around 400,000 barrels a day were being exported by Erbil through Ankara, in addition to some 75,000 barrels of Kirkuk oil daily through the same pipeline.
The KRG is heavily reliant on oil revenues and an inability to sell its crude has severely impacted its economy. Erbil has lost billions of dollars since the exports were halted.
Iraq passed its highly-contentious federal budget in June after months of discussions. The budget law obliges the KRG to sell 400,000 barrels of crude oil through Iraq’s national oil marketing body and if the suspension continues, Iraq will take Kurdish oil for its internal use.
“Should the pipeline outage continue, foreign investment will be further reduced, which in turn will put at risk further jobs and the ability for the industry to deliver the 400,000 barrels of oil per day required under the 2023-2025 Federal Budget Law,” said APIKUR in its statement.
Turkish President Recep Tayyip Erdogan earlier this month claimed that the suspension of Region’s oil exports is because of problems between Baghdad and Erbil. However, an Iraqi oil ministry official refuted Erdogan, saying the Kurdish and Iraqi government are on the same page regarding the issue.
Turkey stopped the flow of Kurdish oil through the Iraq-Turkey pipeline after a Paris arbitration court on March 23 ruled in favor of Baghdad, saying Ankara had breached a 1973 pipeline agreement when it allowed the Kurdistan Region to begin independent oil exports in 2014. Despite several talks between the Kurdish, Iraqi and Turkish officials, the oil export has not resumed.
The Association of the Petroleum Industry of Kurdistan (APIKUR), which includes international oil and gas companies that are directly or indirectly involved in the production of the Kurdish oil, warned on Tuesday that the foreign investment in the Region is being severely affected since the flow of the oil to the international markets halted four months ago.
“The ongoing closure is having a significant impact on foreign investment in Kurdistan, and a prolonged closure threatens thousands of jobs in the region,” said the association in a statement.
“To date, APIKUR member companies, which include DNO, Genel Energy, Gulf Keystone Petroleum, HKN Energy and ShaMaran Petroleum, have reduced spending plans in the region by some $400 million in 2023, with 2024 spending plans under review,” it added, noting that “our Member companies have already had to take steps to cut costs, which have resulted in hundreds of personnel layoffs.”
Before the halt, around 400,000 barrels a day were being exported by Erbil through Ankara, in addition to some 75,000 barrels of Kirkuk oil daily through the same pipeline.
The KRG is heavily reliant on oil revenues and an inability to sell its crude has severely impacted its economy. Erbil has lost billions of dollars since the exports were halted.
Iraq passed its highly-contentious federal budget in June after months of discussions. The budget law obliges the KRG to sell 400,000 barrels of crude oil through Iraq’s national oil marketing body and if the suspension continues, Iraq will take Kurdish oil for its internal use.
“Should the pipeline outage continue, foreign investment will be further reduced, which in turn will put at risk further jobs and the ability for the industry to deliver the 400,000 barrels of oil per day required under the 2023-2025 Federal Budget Law,” said APIKUR in its statement.
Turkish President Recep Tayyip Erdogan earlier this month claimed that the suspension of Region’s oil exports is because of problems between Baghdad and Erbil. However, an Iraqi oil ministry official refuted Erdogan, saying the Kurdish and Iraqi government are on the same page regarding the issue.
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