APIKUR Welcomes Iraqi Parliament’s Proposal to Amend Budget Law for Oil Export Resumption

Peregraf 

The Association of the Petroleum Industry of Kurdistan (APIKUR) has released a statement expressing optimism about recent efforts to restore oil exports through the Iraq-Türkiye Pipeline (ITP). APIKUR member companies have shown support for the Iraqi Parliament’s proposal to amend Article 12 of the Budget Law, a measure that could address longstanding concerns about commercial terms and guarantee payments for past and future oil exports.

APIKUR emphasized its readiness to engage in constructive discussions with both the Government of Iraq and the Kurdistan Regional Government to work out key details and finalize written agreements, a crucial step for resuming oil exports through the ITP.

“We share the view of Iraqi Prime Minister Mohamed Shia al-Sudani and KRG Prime Minister Masrour Barzani that reopening the ITP would be beneficial for all Iraqis,” the statement reads, underscoring the broader national interest in restoring oil flow through the critical pipeline.

The association hopes that progress on these amendments will bring long-term stability to Iraq’s oil export operations and provide clarity for industry stakeholders.

Last week, the Iraqi Council of Ministers approved a proposal to resume oil exports from the Kurdistan Region, which would increase the cost of production and transportation of oil from the Kurdistan Region to $16 through an amendment to Article 12 of the budget law.

Since March 25, 2023, the export of oil from the Kurdistan Region and Kirkuk to international markets has been halted due to a ruling by the International Court of Arbitration in Paris, which arose from a complaint lodged by Iraq against Turkey. The cessation of oil exports has resulted in damages exceeding $23 billion for both Iraq and the Kurdistan Region.

The primary challenge regarding the amendment of oil contracts pertains to the payment of production costs and the financial obligations owed to international companies operating in the Kurdistan Region's oil sector. The Iraqi government is dissatisfied with the partnership-type contracts that the KRG has established with these companies. Iraq seeks to lower the agreed payment per barrel of oil between the Kurdistan Region and the oil companies, and various proposals have been put forth. However, Iraq has yet to persuade the companies to accept these changes.