ECONOMY
Iraqi parliament's financial committee and KRG joint press conference in Erbil on September 26, 2024. Photo: handout
ERBIL, Kurdistan Region - With the goal of restarting oil exports that have been stalled for 18 months, the Iraqi parliament’s financial committee and the Kurdistan Regional Government (KRG) on Thursday reached an initial agreement to review the Kurdish government’s contracts with international oil companies, the head of the committee announced on Thursday.
Atwan al-Atwani, head of the federal parliament’s financial committee, is leading a delegation visiting Erbil for meetings with KRG officials on a range of pressing issues between Erbil and Baghdad, primarily the suspension of oil exports.
The parliamentary committee “reached an initial agreement with the regional government to conduct a comprehensive review of oil contracts to adapt them to the Iraqi constitution, in preparation for solving the problem of stopping the region's oil exports,” Atwani’s office said in a statement.
He added that the deal stipulates that the federal and regional governments should enter negotiations with the international oil producers as a unified front, “with the aim of amending their contracts from production partnership to profit sharing, in addition to reviewing the economic and commercial terms.”
Representatives from the KRG’s financial, natural resources and planning ministries were in the meeting with the Iraqi lawmakers, Umed Sabah, president of the office (diwan) of the Council of Ministers, said in a statement.
They discussed issues related to oil, salaries of KRG’s civil servants, border crossings and local revenues, Sabah said, without commenting on any agreements made.
“We notice that there is a serious intention to find convenient solutions for all issues,” he said.
Kurdistan Region’s oil exports through the Iraq-Turkey pipeline have been halted since March 2023, when a Paris-based arbitration court ruled in favor of Baghdad that Ankara had breached a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014.
Before the halt, Erbil exported around 400,000 barrels per day through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.
When it began its independent oil sector, the KRG signed production-sharing contracts with international oil companies. Under this model, the oil companies cover the entire cost of production while the KRG receives the lion’s share of the profits from successful projects.
Baghdad has repeatedly said that these contracts violate the constitution and must be amended to match the service contracts that the federal government prefers before exports can resume.
The Association of the Petroleum Industry of Kurdistan (APIKUR), which represents companies operating in the Kurdistan Region, said on Sunday that it was “encouraged by the public statements from the Iraqi Prime Minister that the ITP [Iraq-Turkey Pipeline] can be reopened by the end of 2024.”
Iraqi Prime Minister Mohammed Shia’ al-Sudani is in New York to attend the United Nations General Assembly. Before he travelled, he told Bloomberg in a televised interview that “there are ongoing talks with the companies and with brothers in the Kurdistan Region. And we hope to reach a solution based on the legal paths.”
He said a solution by the end of 2024 was “possible.”
Myles Caggins, APIKUR spokesperson, told Rudaw's Bijar Bashqali on Thursday that "APIKUR has not received any official confirmation of the discussions between officials from the KRG and Iraqi Parliament. We continue to call for agreements to restore oil exports through the Iraq-Türkiye Pipeline line."
Updated at 8:20 pm
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