ERBIL, Kurdistan Region - The Kurdistan Region has sent over 10 million barrels of oil to international markets through the federal government since its exports resumed late September, the Region’s natural resources minister said on Tuesday.
Kurdistan Region’s oil exports resumed on September 27 following a tripartite agreement between Erbil, Baghdad and the international oil companies operating in the Region. The exports were halted in March 2023 after Iraq won a case against Turkey in a Paris-based arbitration court.
“Between 200,000 to 210,000 barrels [of oil] are exported to Ceyhan Port [in Turkey] per day. As of today, I can say 10.5 million barrels have been exported through the KPC [Kurdistan Pipeline Company],” Kamal Mohammed told Rudaw.
The minister noted that although current average exports stand between 200,000 and 210,000 barrels of oil per day, this figure can fluctuate from day to day depending on the storage capacity available at Ceyhan Port.
Mohammed also stated that the Turkey-Iraq Pipeline has the capacity to export 750,000 barrels of oil per day, adding that the Kurdistan Region used to export between 400,000 to 420,000 barrels per day before the exports were halted in 2023.
The Kurdish minister said that Kurdistan Region’s current oil production is 260-270,000 barrels per day. He added that 50,000 will be for local use.
Under the new terms, the KRG's natural resources ministry has committed to deliver a minimum of 230,000 barrels per day (bpd) to Iraq’s State Oil Marketing Company (SOMO) for export. An additional 50,000 bpd will be used for domestic consumption in the Kurdistan Region.
Hamdi Singary, deputy director of Iraq’s State Oil Marketing Organization (SOMO), told Rudaw in October that oil exports from the Kurdistan Region will continue as long as “good intentions” persist between Baghdad, Erbil, and the oil companies operating in the Region.
The accord will “automatically renew on a monthly basis” if all parties agree, Singary affirmed.
Mohammed said the agreement, set to last for three months, could remain in effect until Iraq adopts a new budget law. The current budget law, covering 2023, 2024, and 2025, expires by the end of this year.
“This agreement is not only for three months, but will continue, because the budget law was for three years. It will expire at the end of this year,” he said. “The process will continue until a new law is passed.”
He stated that production could once again exceed 400,000 barrels per day once all oil fields that were operational before 2023 resume production.
Asked why some oil fields are still not operating, the minister explained that the operating companies “were not sure about the mechanism of the payment of their financial entitlements although they have agreed [to resume production]. The oil [production at these fields] was halted for more than three months. It will take some time until the process resumes. I expect another field to enter [produce oil for export] next week… This will add an estimated between 5,000 to 10,000 [barrels]. The other fields currently operating have begun digging with the aim of increasing production.”
Norwegian oil firm DNO was among companies which did not join the tripartite agreement. The company announced earlier this year that it had restored production in oil fields in the Kurdistan Region, which were targeted by drone attacks in July, adding that it plans to dig more wells to increase production to 100,000 barrels per day (bpd).
“With rapid repairs, gross production has been restored to approximately 75,000 boepd currently,” said the Norwegian firm in a statement.
Mohammed said DNO has no issue with the exports.
“Initially, DNO had an issue but it has been resolved. DNO has also increased production. It used to produce 50-55,000 [barrels of oil per day] but this has increased 70-75,000. It is one of the best firms. It has no issue regarding exports,” he said.
Wood Mackenzie, an advisory firm, has been tasked with reviewing production costs, investment levels, and profit margins per barrel of oil for international oil companies (IOCs) operating in the Kurdistan Region.
The Kurdish minister said the company has not yet begun operations, citing the absence of a contract between Baghdad and the company.
Until the company determines the entitlements of operating companies for oil production, they will receive oil from Baghdad instead of cash. Mohammed added that all parties will abide by any decision made by the company regarding each barrel of oil produced in the Kurdistan Region.
Sangar Abdulrahman contributed to this article.