Oil association denies agreement to resume Kurdish exports

ERBIL, Kurdistan Region - Oil producers in the Kurdistan Region on Saturday denied claims by Baghdad officials that an agreement has been reached to resume the Region’s oil exports.

In a statement, the Association of the Petroleum Industry of Kurdistan (APIKUR) denied “claims by Government of Iraq (GoI) officials that an agreement has been reached among the GoI, the Kurdistan Regional Government (KRG), and international oil companies (IOCs) to resume oil exports through the Iraq-Türkiye Pipeline (ITP).”

APIKUR said that they are yet to receive any proposals from Erbil or Baghdad to strike an agreement that would facilitate the reopening of the pipeline. 

“We do not understand the motivation for such misinformation but note that Iraq is reportedly losing $1 billion for each month that ITP remains closed,” added the statement.

The statement came hours after Iraqi Foreign Minister Fuad Hussein told Bloomberg that Baghdad may amend its budget to pay recovery and transit fees to the IOCs in a bid to restart oil exports.

Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023 after a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had breached a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014. 

Despite several talks between Kurdish, Iraqi, and Turkish officials, oil exports have yet to be resumed. As a result, many IOCs in the Region have suspended production. 

Erbil and Baghdad have held numerous meetings since the halt but to no avail. In December, APIKUR said it had been excluded from the talks. 

APIKUR representatives attended a meeting between Baghdad, Erbil, and the IOCs in January “but, thus far, there has been no concrete progress towards that end presented by members of APIKUR,” according to the association. 

In late January, APIKUR addressed the US Congress in a letter requesting assistance to persuade Baghdad to resolve issues that resulted in “the halt of greater than 400,000 barrels a day of crude oil from the KRI [Kurdistan Region of Iraq] to global markets.” 

Last month, APIKUR called on US officials who attended the Munich Security Conference to use the “prime opportunity” presented by the event to discuss the issue of oil exports directly with Iraqi Prime Minister Mohammed Shia’ al-Sudani, who was also attending the conference.

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.