Kurdistan Oil Industry Association Endorses Budget Law Amendment by Iraqi Parliament
The Kurdistan Oil Industry Association (APCO) has expressed its approval of the recent amendment to the budget law by the Iraqi parliament, which paves the way for improved oil export agreements. According to Miles Kagns, APCO’s spokesperson, this legislative development is crucial for resuming oil exports through the Iraq-Turkey pipeline.
APCO, a collective of companies investing in the Kurdistan Regional Government’s (KRG) oil sector, emphasizes collaboration within this consolidated group to address industry challenges effectively.
The context for this amendment follows a significant suspension of oil exports through the Turkish port, a freeze that resulted from a complaint filed by the Iraqi government in late March 2023. After nearly two years of negotiations, the Iraqi parliament’s approval of the budget amendment on Sunday signifies a pivotal shift, allowing oil exports to resume.
One of the central issues in the negotiations between the Iraqi government and the Kurdistan Region has been the fee structure for oil extraction. The revised budget amendment specifies a cost of $16 per barrel for extraction under Article 12. This development is expected to facilitate smoother operations and a more equitable distribution of resources.
Over the course of the 22-month suspension, the Kurdistan Region has seen the halt of approximately 400,000 barrels of oil per day, alongside an additional 75,000 barrels from Kirkuk, leading to considerable economic consequences. In late December of the previous year, Miles Kagns reported that losses from the suspension of oil exports via the Iraqi-Turkish pipeline amounted to between $23 billion and $24 billion, highlighting the significant financial impact on the Kurdistan Region.
This legislative change is anticipated to restore the flow of oil exports and mitigate the economic strain felt by the Kurdistan Region, marking a critical step toward stabilizing the oil industry and reinforcing its economic potential.