Iraq Engages Oil Firms and Kurdistan Regulator to Resume Crude Exports
Iraq has invited international oil companies and the Kurdistan region’s energy regulator for talks aimed at resuming crude oil exports, following a dispute over revenues. The meeting is set for March 4 in Baghdad, targeting existing contracts and compliance with international standards. The timeline for resuming exports is uncertain, with Kurdish representatives awaiting official communication regarding agreements. Increased U.S. pressure may accelerate negotiations for economic restoration.
Iraq has extended invitations to international oil companies and the Kurdistan region’s energy regulator to engage in discussions aimed at resuming crude oil exports from Kurdistan. This initiative follows a prolonged dispute regarding revenue and expenses. The Iraqi Oil Ministry has summoned the Association of the Petroleum Industry of Kurdistan (Apikur), which represents eight oil-producing companies contributing over 60 percent of Kurdistan’s oil production, for a meeting in Baghdad on March 4.
The purpose of this meeting is to address existing contracts and arrive at agreements that are consistent with international standards for oilfield development, while simultaneously safeguarding national interests. However, Apikur has reiterated that its member companies will not recommence oil exports through Turkey’s Ceyhan port despite previous announcements from Baghdad indicating an imminent restart. The Iraqi government plans to directly process the region’s oil exports through the state-run oil marketing company, SOMO, starting at an initial rate of 185,000 barrels per day.
Despite the Iraqi government’s announcements, Apikur representatives indicated they have yet to receive official communication regarding the upcoming meeting in Baghdad. “Companies are awaiting their official invitation letter,” remarked Myles Caggins, a representative for Apikur. In their statements, Apikur expressed their readiness to meet relevant officials to discuss issues and restore oil exports for the benefit of all Iraqis.
A 970-kilometer pipeline is responsible for transporting crude oil from the Iraqi-Kurdish Kirkuk area to export terminals at Ceyhan on Turkey’s Mediterranean coast. In March 2023, Turkey ceased the flow of about 450,000 barrels of Iraqi oil daily, primarily due to a decision by an arbitration court siding with Baghdad on the legality of Kurdish exports without federal consent.
Negotiations have been complicated by unresolved matters pertaining to payments, contracts, and pricing structures. Previous discussions in Erbil did not yield an agreement, highlighting the federal government’s desire to restart exports without committing to a payment framework for the Kurdistan regional government.
The timeline for the resumption of exports remains uncertain, and a Kurdish official indicated there is no set date yet. However, discussions suggest that Kurdish oil exports may resume soon, potentially within the first week of March. Increased pressure from the United States has been reported as a critical factor in Iraq’s approach to addressing Kurdish oil exports.
An advisor to Iraqi Prime Minister Mohammed Shia Al Sudani denied allegations of U.S. pressure, asserting that there had been no threats of sanctions. Nevertheless, recent communications between U.S. Secretary of State Marco Rubio and Prime Minister Al Sudani emphasized the importance of Iraq’s energy independence, advocating for the rapid reopening of the Iraq-Turkey pipeline and adherence to contracts with U.S. firms.
In summary, Iraq’s initiative to invite oil companies and Kurdistan’s energy regulator for talks on crude oil exports marks a significant move towards resolving long-standing disputes over oil revenues and contracts. While the aspirations for a swift resumption of exports exist, the actual timeline remains uncertain. The ongoing disputes reflect a complex interplay of political and economic factors, including external pressures. Success in upcoming negotiations could restore vital oil exports, benefiting both the regional and national economies. The Iraqi government’s strategy underscores its intention to harmonize operations with international best practices while safeguarding national interests.
Original Source: www.thenationalnews.com
