Tripartite Agreement Signed in Erbil to Resume Kurdistan Oil Exports

Economy 04:50 PM - 2025-09-22

An oil pipeline in Kirkuk province.

A tripartite agreement between the Kurdistan Regional Government (KRG), the Iraqi federal government, and international oil companies operating in the Kurdistan Region has been signed in Erbil, paving the way for the long-awaited resumption of oil exports.

According to Iraqi media, the deal ends more than two years of deadlock following the halt of exports through Türkiye’s Ceyhan pipeline in March 2023, after legal and technical disputes.

Exports through Türkiye’s Ceyhan port were halted in March 2023, following an arbitration ruling by the International Chamber of Commerce in Paris. The tribunal determined that Türkiye had breached a 1973 pipeline transit agreement by permitting the Kurdistan Regional Government (KRG) to export crude independently of Baghdad.

Oil Companies’ Fees Raised

After months of tensions, Baghdad, Erbil, and international oil companies have reached a landmark agreement to resolve one of Iraq’s most complex energy disputes, clearing the way for the resumption of Kurdistan Region oil exports through Türkiye’s Ceyhan port. The deal raises payments to foreign operators—granting them oil shares instead of direct cash transfers—and marks a significant step forward. Yet, with major security, political, and economic hurdles still in place, its durability will depend on the continued commitment of all three parties.

Moreover, Iraq remains committed to maintaining stable production levels under OPEC+, meaning that any resumption of northern exports will be offset by a corresponding reduction from the south. Following months of negotiations and reciprocal visits, Baghdad and Erbil have now reached a historic agreement with international oil companies to resolve the crisis over Kurdistan Region oil exports through Türkiye’s Ceyhan port. The agreement, finalised after two months of intensive talks, came as both sides consistently signalled their readiness for a comprehensive settlement.

A government source told PUKMEDIA: “Foreign companies initially insisted on resolving disputes through international courts, but Baghdad rejected this and demanded that all disagreements be settled under Iraqi law. Eventually, the companies accepted Baghdad’s terms, and the matter was finalised.”

Next Steps with Türkiye

The source also revealed that a high-level delegation, led by Iraqi Oil Minister Hayyan Abdul Ghani accompanied by the head of the State Organisation for Marketing Oil (SOMO), will soon visit Ankara to negotiate with Turkish officials on restarting exports via the Ceyhan port. 

Talks will also address drafting a new pipeline agreement, replacing the previous deal with Türkiye that was due to expire in July 2026, the source noted.

Export Capacity and Production

According to experts, exports are expected to begin at around 100,000 barrels per day and gradually increase to 300,000 once technical assessments and arrangements with Türkiye are complete.

Under the tripartite agreement, the Kurdistan Region will produce 280,000 barrels daily. Of this, 50,000 barrels will be allocated for domestic consumption, while 230,000 barrels will be delivered to SOMO for export.

The oil companies involved have not yet publicly commented on the agreement, which is set to be approved by the Iraqi Council of Ministers on Tuesday. 

Disputes between Baghdad and Erbil over the Kurdistan Region’s share of the federal budget have persisted for years, directly impacting public sector salaries. Over the past eight months, the federal government has transferred funds for only six salary payments in the Kurdistan Region.



PUKMEDIA