Exports of the Kurdistan Region’s oil through the Iraq-Turkey pipeline have been halted since March 23 when the Paris-based arbitration court ruled in favor of Baghdad against Ankara, stating Turkey had breached a 1973 agreement by allowing Erbil to begin independent oil exports in 2014.
In a letter addressed to the US Congress which was seen by Rudaw English, the Association of the Petroleum Industry of Kurdistan (APIKUR) requested “immediate assistance to persuade the Federal Government of Iraq (GOI) to promptly resolve issues that have resulted in the halt of greater than 400,000 barrels a day of crude oil from the KRI [Kurdistan Region] to global markets.”
The oil association noted that the halt on oil exports has put at risk both US and international investments in the Kurdistan Region which total over $10 billion.
In September, US Secretary of State Antony Blinken extended an invitation from US President Joe Biden to Iraqi Prime Minister Mohammed Shia’ al-Sudani to visit the White House. APIKUR called on the US Congress to use the visit to persuade “the Iraqi PM that GoI must allow U.S. oil companies, and all APIKUR members, to freely produce and export their oil to the global markets.”
The Iraqi government must resolve two issues, namely “the full implementation of the Iraqi budget for the Kurdistan Region which is essential for western and American companies to resume operations, as well as payment surety for past and future oil exports in accordance with their contractual rights,” according to APIKUR.
“The Iraqi Prime Minister should demonstrate that he is committed to leading his government to deliver a mutually beneficial solution that will no longer economically strangle the Kurdistan Region of Iraq,” said Myles B. Caggins III, APIKUR spokesman.
Erbil and Baghdad have had multiple rounds of talks about restarting the exports. Kurdistan Region President Nechirvan Barzani in November said the problem now is technical rather than political.
Following rounds of meetings with Iraqi government officials and political leaders earlier this month, Barzani said that Erbil and Baghdad were “on the right path” to solving the problem of the Kurdistan Region’s stalled oil exports.
“I cannot say when, but I think we are on the right path to solve the [oil exports] issue,” Barzani said.
PM Sudani told Bloomberg earlier this month that the main obstacle hindering the resumption of oil exports is that the International Oil Companies (IOCs) “have an issue with the cost of producing barrels.”
On Wednesday, the Kurdistan Regional Government (KRG) met with IOCs to discuss progress in talks with the federal government about resuming oil exports.
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’s oil.
The loss in oil revenues, the KRG’s main source of income, has worsened the financial situation and left the government unable to pay its public sector without assistance from Baghdad.
