ERBIL, Kurdistan Region - 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, a senior executive from the federal body responsible for marketing Iraqi and Kurdish oil told Rudaw on Monday, noting that production is set to increase.
Hamdi Singary, deputy director of Iraq’s State Oil Marketing Organization (SOMO), said that the current three-month agreement between the federal government, the Kurdistan Regional Government (KRG), and international oil companies (IOCs) is set to expire on December 31.
However, the accord will “automatically renew on a monthly basis” if all parties agree, Singary affirmed.
Oil exports from the Region resumed in late September following a tripartite three-months deal between the federal government, the Kurdistan Regional Government (KRG) and the IOCs.
The exports resumed after a suspension of nearly two and a half years, due to a March 2023 ruling by a Paris-based arbitration court that found Turkey had violated a 1973 pipeline agreement by permitting Erbil to independently export oil since 2014.
Under the current agreement, Kurdish oil is handed over to SOMO, with a portion allocated for domestic use.
“The oil issue has been finalized … if the [political] intentions are good, we won’t face any problems [in the future],” Singary remarked. Oil fields in the Kurdistan Region are currently producing around 180,000 to 190,000 barrels per day (bpd), with output “continuously rising," he elaborated.
Before the March 2023 halt, Erbil was exporting about 400,000 bpd through the Iraq-Turkey pipeline, in addition to approximately 75,000 bpd of Kirkuk’s oil.
However, the Iraqi oil ministry reported in August that the Region’s output had dropped by 100,000 bpd from the previously agreed 230,000 bpd due to drone attacks in July targeting key energy infrastructure.
Singary noted that much of the Kurdistan Region’s oil is currently being exported to European markets, avoiding longer sea routes.
Moreover, he explained that oil companies operating in the Region are required to submit compensation reports, detailing production costs in the Kurdistan Region “within 60 days of the resumption of oil export,” by November 27.
An amendment to Iraq’s federal budget law in February had provisionally set a payment of $16 per barrel for production and transportation costs to IOCs, pending an assessment by an international consultant to determine the actual rate.
Singary warned that the consultant’s evaluation will not be simple. “It is not an easy job…I do not believe it will finish in 60 days. There will be extensions, 100 percent,” he said.