Iraqi Oil Minister: Agreement with KRG Nears Completion, One Key Issue Remains

INA

Iraqi Oil Minister Hayyan Abdul Ghani.

Iraqi Oil Minister Hayyan Abdul Ghani has outlined the reasons behind the continued delay in resuming crude oil exports from the Kurdistan Region through the Turkish port of Ceyhan. He confirmed that nearly all issues have been resolved with the Kurdistan Regional Government (KRG), except for disagreements over domestic consumption volumes and refining allocations.

Speaking to the Iraq's state media "INA", Minister Abdul Ghani stated: "The federal budget specifies that the Kurdistan Region must deliver 400,000 barrels of crude oil per day to the Iraqi federal government, specifically to the State Oil Marketing Organisation (SOMO), for export via the Iraq–Türkiye pipeline."

He explained that intensive negotiations had taken place to implement the provisions of this agreement, which culminated in a formal amendment to the budget law to accelerate the delivery process.

"The amendment sets an interim rate of $16 per barrel for production in the Region, pending the appointment of an independent consulting firm to determine the actual production cost per barrel for each oilfield," he noted.

The minister affirmed that this agreement and its amendments had been presented to the KRG and received genuine approval from all parties involved. "It was submitted to Parliament, and the amendment was passed with full parliamentary approval. We then requested the Region to proceed with implementation," he added.

However, Abdul Ghani pointed to a key issue hindering progress: a dispute over the agreed volume of oil allocated for domestic consumption.

"According to the agreement between the  Financial Monitoring Bureaus of both the federal and regional governments, the domestic consumption quota was set at 46,000 barrels per day. The Region is now demanding 65,000 barrels per day, which contravenes the terms of the budget law," he stated.

He stressed that this is the only major clause yet to be finalised: "We are hopeful that in the final stage, the Region will agree to the figure previously approved by the audit boards, allowing us to move forward with implementation."

Minister Abdul Ghani also confirmed that the federal government has informed both the Turkish and Kurdish authorities of its readiness to resume exports. 

"I met with the Turkish Minister of Energy, who confirmed that Türkiye is prepared to restart exports via the Iraq–Türkiye pipeline to the port of Ceyhan. Now, we are simply waiting for our brothers in the Region to deliver the agreed quantity," he said.

He concluded by highlighting the cost of continued delays: "The federal government is currently losing around 300,000 barrels per day, as this volume is included within Iraq's OPEC production quota, despite the federal treasury receiving no benefit from it."

Oil exports from the Kurdistan Region through Türkiye’s Ceyhan port have been halted since March 2023, following a ruling by the International Chamber of Commerce (ICC) in Paris. The court sided with the Iraqi federal government, stating that Türkiye had violated a 1973 agreement by allowing the KRG to export oil independently via the Iraq–Türkiye pipeline without Baghdad’s consent.

In the same context, the Iraqi federal government has suspended the disbursement of the KRG's share of the national budget, asserting that the Region’s full share of the national budget for 2023, 2024, and 2025—approved by Parliament—had already been disbursed. The move has left public sector employees in the Kurdistan Region without salaries for over two months. As of mid-July, employees have yet to receive their May salaries, exacerbating financial hardship and public frustration across the Region. 



PUKMEDIA