Iraqi Kurdistan to resume oil production within three days

The Iraqi Minister of Oil, Hayan Abdul-Ghani, announced expectations of an agreement within three days with the Kurdistan Regional Government (KRG) and foreign oil companies in Iraqi Kurdistan to resume oil production.

During his visit to Erbil, Abdul-Ghani highlighted the understanding reached with Turkey regarding the resumption of Iraqi Kurdistan’s oil exports through the Iraq-Turkey pipeline, aiming to resolve the late payments issue of approximately one billion dollars.

Norwegian company DNO revealed that international oil companies operating in the Kurdistan region will withhold oil production for export until the outstanding late payments issue is addressed. The Association of the Petroleum Industry of Kurdistan (APIKUR) estimated losses of $7 billion due to Turkey’s closure of the oil pipeline in March, as stated in mid-October.

The Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, reported the completion of the inspection of the Iraq-Turkey oil pipeline in September, indicating its technical readiness for operation. Maintenance work was conducted due to damages caused by floods in the seismically active area through which the pipeline passes.

DNO emphasized that APIKUR members, including itself, will not resume exports until clarity is provided on how they will receive contractual entitlements for already sold and exported oil. The company cited accumulated debts exceeding $300 million owed to the KRG from previous oil sales in 2022 and 2023.

Turkey had halted Iraq’s 450,000 barrels per day oil exports through the pipeline on March 25, following an International Chamber of Commerce (ICC) arbitration decision in Paris. The decision compelled Turkey to compensate Baghdad with $1.5 billion for damages resulting from the KRG’s unauthorized oil exports between 2014 and 2018. The KRG initiated independent crude oil exports in 2013, a move deemed illegal by Baghdad.