The Iraqi government is exploring options to restructure its budget to reimburse foreign companies managing oil fields in the Kurdistan region, with the aim of bringing the oil production in the semi-autonomous area back online.
The Iraqi Prime Minister, Mohammed Shia Al-Sudani, has recently stated to Bloomberg that the government is currently in discussions with the parliamentary financial committee to amend relevant laws. This move comes in response to companies operating in Iraqi Kurdistan, who are currently awaiting payments to cover their production costs, as reported by Oil Price.
Since March, approximately 450,000 barrels per day of oil from Iraq’s northern resources have been blocked due to a disagreement over the authority to approve oil exports from Iraqi Kurdistan. As a result, the country is currently limited to selling oil only through its southern oil export terminals.
On November 12, the Iraqi Oil Minister, Hayan Abdul-Ghani, announced that an agreement would be reached with the Kurdistan Regional Government (KRG), oil companies, and Ankara to resume oil exports from Iraq to Turkey.
During that time, the Ministry of Oil in Iraq released a statement mentioning that Abdul-Ghani and his delegation held a meeting with the Prime Minister of Iraqi Kurdistan in Erbil. The meeting was held to discuss the issues related to oil exports, which had been discontinued for several months.
Turkey halted Iraq’s 450,000 barrels per day oil exports on March 25 by blocking the pipeline running from Iraq’s Kurdistan region to the Turkish port of Ceyhan.
Turkey suspended oil exports after an ICC arbitration decision in Paris.
The KRG’s unauthorized export of oil from 2014 to 2018 resulted in an obligation for Turkey to pay Baghdad $1.5 billion in compensation for damages.
In 2013, the Kurdistan Regional Government (KRG) started exporting crude oil on its own, which was considered an illegal move by Baghdad.
Delays in resuming oil exports from Iraqi Kurdistan were caused by discussions between the State Organization for Marketing of Oil (SOMO) and the KRG over an export deal, as well as the Turkish presidential elections.
The pipeline suspension has caused a liquidity shortage in Kurdistan, Iraq.
According to Iraqi politicians and Kurdish lawmakers, Iraqi Kurdistan had to accept only 12.67 percent of the $153 billion budget approved by the Iraqi Parliament. Stay updated on the latest news and exchange rates of the top nine currencies with our informative insights and analysis. Remain informed and make wise decisions.
