KRG Delegation Stresses Need for Agreement Prior to Oil Exports
The Kurdistan Regional Government (KRG) negotiating delegation has asserted that an agreement must be established regarding the allocation of oil for domestic consumption before any exports commence. This stance follows an explanation from the Iraqi Oil Ministry concerning the ongoing negotiations for oil exports from the Kurdistan Region of Iraq.
In a statement made on February 22, the KRG delegation reaffirmed its commitment to the first amendment of the federal budget law, which pertains to the re-exportation of oil sourced from the region’s fields to the Turkish port via the oil marketing company (SOMO). This position emerged from a meeting held on February 18 between KRG representatives and officials from the Federal Ministry of Oil in Erbil.
The KRG negotiating team emphasized that the mechanism for oil exports requires a clear agreement to ensure that entitlements for KRG production and transport companies are paid. Acknowledgment of this issue is deemed essential, especially in discussions with the Federal Ministry of Finance.
In a recent update, the Iraqi Oil Ministry clarified that procedures for exporting oil from the Kurdistan Region through the Jayhan port have been completed. It called upon the KRG to provide sufficient oil products to SOMO to facilitate the resumption of exports.
The KRG delegation further highlighted the importance of discussing "necessary issues" with the approval of federal authorities, which was a focal point of their recent dialogue.
In light of the discussions, the KRG reiterated the urgency of resuming oil exports through SOMO, to ensure that revenues are deposited into the federal treasury. Currently, since March 2023, the export of 400,000 barrels of oil per day from the Kurdistan Region, along with an additional 75,000 barrels from Kirkuk, has been suspended. This halt follows a ruling from an international arbitration court in Paris favoring the Iraqi central government, which highlighted the need for KRG to align its oil activities with Baghdad’s consent.
Additionally, on February 2, 2025, the Iraqi parliament approved a significant amendment to the budget law, which eliminated Article 12 and introduced a revised framework. This amendment was officially published in the Iraqi newspaper Waqa’i on February 18, 2025, marking its commencement.
Under the new provisions, the KRG has set a cost of $16 for the production and transportation of oil. It has been stipulated that an international consulting entity will establish an estimated price within a 60-day timeframe to ensure clarity and efficiency moving forward.
