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Iraqi Oil Minister: Kurdistan Region sells 286,000 barrels of oil per day without our knowledge

Iraqi oil minister says the Kurdistan Region produces 286,000 barrels of oil per day and Iran has forged Iraqi documents to avoid US sanctions. Iraqi oil minister Hayan Abdul Ghani said in an interview on Iraqi television that he told OPEC that the Kurdistan Region currently produces 286,000 barrels of oil per day and stressed that the oil production is not under the control of his ministry. He added that according to the budget law, $16 per barrel of oil production has been allocated to the Kurdistan Region, and the amount of oil exported through the port is expected to reach 350,000 barrels per day. The Iraqi oil minister said: that Iraq currently exports 3.2 million to 3.5 million barrels of oil per day, but Iran has forged Iraqi documents to avoid US sanctions.

Final kink obstructs reopening of Iraq-Turkey pipeline

By William Sellars / AGBI Iraq’s oil pipeline through Turkey – which has been closed for two years – is not just a pipeline. It raises a cornucopia of issues: declining Russian oil exports to Turkey, US pressure on Iraq to stop illicit Iraqi oil exports to Iran, peace with the militant Kurdistan Workers Party (PKK) in eastern Turkey, how to split oil revenue between the Iraqi central government in Baghdad and the autonomous Kurdish region, and, finally, how to settle $1 billion dollars in arrears. Resolution may be drawing closer but the last mile, or two, may be the hardest as the oil companies and the Kurdistan Regional Government (KRG) struggle over financial claims. Iraq’s oil ministry said on February 22 that it could begin exports through the pipeline – running from Kirkuk in Kurdistan to the port of Yumurtalık in the Turkish seaside district of Ceyhan – “within two days”. A month later that has not happened. In part, that is because the Association of the Petroleum Industry of Kurdistan (Apikur) – which represents international operators drilling for oil under production-sharing agreements with the KRG – says there is as yet no agreement allowing for the resumption of exports via this pipeline. Apikur members are owed nearly $1 billion in arrears, the association said last year. “Discussions between the government of Iraq, KRG and IOCs [international oil companies] are ongoing,” Myles B Caggins, Apikur spokesman, tells AGBI by email. “We anticipate the US government will continue to apply pressure to Baghdad to ensure all sides reach an agreement swiftly.” The US is putting pressure on Iraq to halt clandestine shipments of crude oil to neighbouring Iran – with which the US has been at odds since the 1979 revolution – or else be subject to sanctions. Up to 200,000 barrels per day (bpd) of Iraqi crude, mainly from the Kurdish north, flow to Iran. Apikur members include the UK’s Genel Energy, London-listed Gulf Keystone Petroleum, HKN Energy, which has its headquarters in Dallas, Norway’s DNO and Canada’s ShaMaran Petroleum. Turkey halted shipments of Iraqi oil through the 970km pipeline in March 2023. Then a Paris-based arbitration tribunal ruled in favour of Baghdad in a case launched by the Iraqi government, which claimed Ankara and the KRG had been illegally exporting oil. The International Criminal Court found both the KRG and Turkey at fault. A general view of oil tanks at Turkey’s Mediterranean port of Ceyhan It fined the latter $1.5 billion and authorised the Iraq state oil marketing organisation, Somo, to control exports out of Ceyhan, a ruling that led Turkey to close the pipeline immediately. Ankara rejected any liability to pay compensation to Baghdad, a position it maintains to this day. Earnings from oil exports At its peak the Ceyhan pipeline carried 400,000 bpd of oil from autonomous Kurdistan, along with up to 75,000 bpd from other parts of Iraq fully controlled by the government in Baghdad. The combined total was equivalent to about 0.5 percent of global oil production. Baghdad successfully argued that earnings from oil exports should be paid to the central government, then redistributed to regional authorities. That problem now appears to have been solved. Early in February the government in Baghdad, under prime minister Mohammed Shia Sudani, agreed to raise the “cost recovery” to the KRG authority in Arbil. The amendment now sets what goes from the central government to the KRG to cover transport and production costs to $16 per barrel, up from an earlier proposal of $7.90 per barrel. In the meantime, Apikur says the Iraqi government – which faces an election in October – has lost out on $28 billion of earnings. Ankara too has missed out on transit fees and access to greater volumes of the Iraqi crude. “We are talking about a relationship of interdependence here,” says Büşra Zeynep Özdemir, an energy researcher at Istanbul-based research body Seta Foundation. “Iraqi oil is important for Turkey, just as the Turkish market is also very important for Iraq. Turkey is one of the largest energy-consuming countries in the region as well as acting as an intermediary for Iraqi oil to reach other countries via Yumurtalık.” Military ceasefire Progress towards resolution has also been helped by a ceasefire declaration from the PKK, which has bases in northern Iraq. The pipeline was put out of commission several times as a result of attacks, both by the PKK and the still active Isis – or Daesh – most recently in 2020. A resumption of shipments through the Kirkuk-Ceyhan pipeline has taken on increased importance for Ankara as Turkey comes under pressure to reduce its imports of Russian crude or also face sanctions. Turkey’s leading refiner Tüpraş said in January it was suspending all imports of Russian crude in response to stepped-up threats of US sanctions. Russian oil accounted for more than 60 percent of all Turkish crude imports last year, with Tüpraş estimated to have taken delivery of 225,000 bpd in 2024. With the Russian door possibly closing, the possibility of Iraqi crude imports takes on greater significance for Ankara.

Moscow is resuming oil and gas operations in Iraq’s Kurdistan Region (KRI)

Russia is to restart its key oil and gas operations in the semi-autonomous Kurdistan Region of Iraq (KRI) according to recent comments from its Energy Minister Sergei Tsivilev. From 2017 until the forced removal of President Bashar al-Assad of Syria, Moscow’s extensive energy operations in the KRI provided it with very cheap oil and gas supplies and were also an integral part of its growing geopolitical presence on the western flank of the Middle East. This encompassed the KRI, much of the rest of Iraq under the control of its Federal Government (FGI) in Baghdad, Syria, and by dint of these the ability to hold sway over all the other ‘Shia Crescent of Power’ countries, as analysed in full in my latest book on the new global oil market order. Given China’s similar policy to expand its influence in the region, with a primary initial focus on Iran and Saudi Arabia, Moscow and Beijing found their efforts especially rewarded after the U.S.’s unilateral withdrawal from the Joint Comprehensive Plan of Action (‘JCPOA’, or colloquially ‘the nuclear deal’) with Iran in May 2018. That said, Russia’s dismal showing in its 2022 invasion of Ukraine and the subsequent removal of front man al-Assad in Syria in moves orchestrated in key respects by the U.S. and U.K. threaten Russia’s and China’s gains across the region. Consequently, this latest move by Russia to restart its operations in the KRI is a high-stakes geopolitical and energy game. Moscow is starting from a very high base level of influence in the KRI. Following the chaos that ensued after over 90% of the KRI’s population voted in favour of independence from Iraq in the September 2017 Independence Referendum, Russia thought the time was right to exploit the discord for its own ends, as also detailed in my latest book. At that point, the Kremlin’s corporate oil proxy Rosneft executed three deals that effectively took over the ownership of Kurdistan’s oil sector. First, Russia provided the KRI’s government (the KRG) with US$1.5 billion in financing through forward oil sales payable in the next three to five years. Second, it took an 80% working interest in five potentially major oil blocks in the region. And third, it established 60% ownership of the vital KRG pipeline by dint of a commitment to invest USD1.8 billion to increase its capacity to one million barrels per day. Moscow considered itself well-placed at that point to leverage this presence into a similarly powerful position in the south of the country (run by the FGI). This was to be effected by striking new oil and gas field exploration and development deals with Baghdad as part of Russia’s role in intermediating in the perennial dispute between the KRI and the FGI on the budget disbursements (from the FGI)-for-oil (from the KRI) deal first struck in November 2014. Russia not only challenged the percentage of the budget payments that was earmarked for payment to the KRI but also insisted that oil flows that had been suspended in the KRI following the September 2017 Independence Referendum would not restart fully until pipeline transit fees and pumping tariffs were paid to Rosneft. By that time, the firm had formalised its 60% stake in the Kirkuk-Ceyhan pipeline. Moscow also wanted the FGI in Baghdad to look again at its decision to deem ‘invalid’ the assignment to Rosneft by the KRG of the five exploration blocks in Kurdish territory in which it had secured an 80% stake. These were estimated to have aggregate 3P reserves of 670 million barrels. Rosneft’s involvement in the KRI not only threatened Iraq’s plans to meet its new in-house oil production targets but also its potential export routes for the new flows, given the Russian company’s involvement in the northern pipelines leading into Turkey’s Ceyhan port. The original Kirkuk to Ceyhan Pipeline – the ITP – consisted of two pipes, which had a nameplate capacity of 1.6 million bpd combined. The FGI-controlled pipeline’s export capacity reached between 250,000 and 400,000 bpd when running normally, although it was subject to regular sabotage by militants of various types. The KRG, in response to the regular attacks on the FGI pipeline, completed its own single-side track Taq field-Khurmala-Kirkuk/Ceyhan pipeline in the border town of Fishkhabur. This was part of its drive to raise oil exports above 1 million bpd. It is interesting to note that Russia’s restarting of its operations in the KRI are occurring at a time when Iraqi oil exports through the ITP remain embargoed mainly because of Baghdad seeking to stop independent oil flows from the KRI. This gives the Kremlin the same sort of potential to leverage chaos into increased influence in both the KRI and FGI regions of Iraq. It is also interesting to note that since the removal of al-Assad from Syria, Western interest in investing in the KRI has surged. The West had been a major sponsor of KRI interests before and during the expansion of Islamic State across the region in 2014, but this had declined as Russia’s influence in neighbouring Syria had expanded over the period, as also analysed in full in my latest book. In very basic terms, a senior source who works closely with the European Union’s (E.U.) energy security complex exclusively told OilPrice.com, the current broad policy of the West is to target investments in the KRI such that it persuades the KRI government to terminate all links with Chinese, Russian and Iranian companies connected to the Islamic Revolutionary Guards Corps over the long term. One such deal that might act as a template for renewed cooperation between the West and Baghdad is BP’s US$25 billion deal formally signed recently to develop four huge oil fields in the Kirkuk region. The U.S. and Israel also have a further strategic interest in utilising the Kurdistan Region as a base for ongoing monitoring operations against Iran. On the other side of the power balance, China and Russia’s general policy is to remove the KRI’s main source of financing -- oil exports – by stopping all independent sales and then gradually reducing all budget dispersals from the FGI down to nothing. As a senior political source in Moscow exclusively told OilPrice.com many months ago: “Iraq will be one unified country and by keeping the West out of energy deals there, the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise.” This ultimate objective was clearly laid out on 3 August last year when Iraqi Prime Minister, Mohammed Al-Sudani said the new unified oil law -- run in every way that matters out of Baghdad -- will govern all oil and gas production and investments in both the FGI and KRI areas and will constitute “a strong factor for Iraq’s unity”. Aside from the geopolitics of it all, the KRI also has enormous oil potential. Prior to the recent rise in exploration activity in the region, more than half of the exploratory wells in Iraq had been drilled prior to 1962, a time when technical limitations and low oil prices meant a much tighter definition of a commercially successful well than would be the case today, as highlighted by the International Energy Agency in its 2017 report on the country Based on the previous limited exploration and development of oil fields in the KRI area, the proven oil reserves figure was first put at around 4 billion barrels. This was subsequently upgraded by the KRI government to 45 billion barrels, but this again may well be a significant underestimate of the oil resources there. Even using the most conservative figures, Iraq had produced only around 15-20% of its ultimately recoverable oil resources back in 2017, compared with 23% for the Middle East as a whole, according to the IEA. This figure for Iraq has not significantly changed since then. Further exploration is highly likely to add substantially to the proven reserves figure over the coming decades, particularly given the high success rate of drilled prospects in Iraq. Similarly propitious are current estimates of at least 200 trillion cubic feet (Tcf, or 5.67 trillion cubic metres) of natural gas reserves in the KRI -- around 3% of the world’s total reserves. By Simon Watkins for Oilprice.com

Iraq-Ceyhan pipeline restart timetable slips again

Officials in Iraq are targeting a March restart of crude exports via the troubled Kirkuk-Ceyhan pipeline, although complications could still cause further delays. The Kurdish Rudaw media outlet reported an Iraqi government spokesperson saying over the weekend that "steps" have been taken to get crude flowing again to the Mediterranean export terminal. "According to our information and the steps that have been taken, Kurdistan region's oil exports may restart this month," said the official, named by Rudaw as Bassem al-Awadi. The latest reports come after an 'imminent' deadline was missed last week despite intervention from US officials, with the 450,000 bpd capacity pipeline coming up to two years since oil was last exported. The spokesman added that more meetings might be needed to "reach a final outcome" but that they are in the "final stages of resolving the disputes," referencing recent talks between various parties. Delays The pipeline restart has faced multiple challenges, including Baghdad agreeing deals with Ankara and regional Kurdish authorities in Erbil, while international companies responsible for 60% of Kurdish oil output are also looking for contractual assurances. In early February, the Iraqi parliament approved amendments to the federal budget law to authorize $16/b in production and transport fees for international oil companies operating in the region, but producers expressed disappointment after last week's talks. Infrastructure, including the pipeline and pumping equipment, will also go through maintenance and safety checks after the extended period of inaction. Iraq is also under close scrutiny from OPEC for persistent overproduction so if output from the north was to increase, Baghdad would be under heavy pressure to make additional cuts in the south of the country. Quantum Commodity Intelligence

Iraqi Kurdistan oil export talks end without deal despite US push

Negotiations to restart Iraqi oil exports to Türkiye, which have been suspended for two years, failed for the second time in a week, according to officials familiar with the matter. The two-year standoff has halted flows from the Kurdistan Regional Government (KRG) region in the north of the country to Türkiye's Mediterranean port of Ceyhan. An official from the U.S. Embassy in Baghdad attended the talks for the first time, which were held at the Iraqi Oil Ministry's headquarters in the city, four sources told Reuters. Washington is applying pressure on Iraq to resume the exports, with Reuters reporting last month that U.S. President Donald Trump's administration had asked Iraq to allow the flows to restart or face sanctions. The U.S. administration's stance in part reflects its "maximum pressure" campaign on neighboring Iran, which includes efforts to squeeze off Tehran's oil exports. The main sticking point at Thursday's meeting was over pricing, one of the two official sources said. Talks on Sunday had also ended without a breakthrough. On Thursday, the ministry insisted on a production cost of $16 per barrel for exported volumes of around 185,000 barrels per day (bpd) but would not apply that price to all production from KRG, one of the sources said, adding that the foreign oil firms involved strongly rejected this. Oil producers working in the KRG include DNO, Genel Energy, Gulf Keystone Petroleum and Shamaran Petroleum. Another source with knowledge of the matter said Baghdad had earlier promised that the price would apply to all production but had backtracked at the Sunday meeting with oil firms. The Association of the Petroleum Industry of Kurdistan (APIKUR), which represents 60% of production from the region, stressed in a statement after the meeting the need for formal agreements ensuring payment security for past and future oil exports. The group also underscored that any deal should respect the production-sharing contracts, or PSC model, ensuring that production costs and profit-sharing terms remain in line with previously agreed contracts. Two-year halt The exports were halted by Türkiye in March 2023 following an arbitration ruling by the International Chamber of Commerce (ICC). The ICC ordered Ankara to pay Baghdad damages of $1.5 billion over what it said were unauthorized exports by the KRG between 2014 and 2018. Türkiye, on the other hand, said the body had recognized most of Ankara's demands. In October 2023, Türkiye said the pipeline was ready for operations and that it was up to Iraq to resume flows. The federal and regional governments in Iraq have been negotiating ever since over the production and transport costs payable to the region and its commercial partners. Flows go through a KRG pipeline to Fish-Khabur on the northern Iraqi border, where the oil enters Türkiye and is pumped to the port of Ceyhan. A resumption is expected to ease economic pressure in the KRG, where the halt has led to salary delays for public sector workers and cuts to essential services. U.S. attendance The U.S. official attended Thursday's talks at the request of Washington, an Iraqi Oil Ministry official with direct knowledge of the matter told Reuters. "The presence of the U.S. diplomat aims to help push the negotiations forward and reach solutions to the issues hindering the resumption of oil exports in a way that satisfies all parties," the official said. "There is a strong insistence from the U.S. side on ensuring the success of the negotiations by any means," said a government official close to the talks. Washington wants the flows via Türkiye restarted partly to boost global supply and therefore help lower prices. At the same time, the U.S. administration wants to halt financial ties between Iraq and neighboring Iran as it applies pressure on Tehran over its oil exports and nuclear program. Iraq is an important ally to the United States and Iran and vital to helping the latter support its economy amid international sanctions. Baghdad is wary of getting caught in the crosshairs of the U.S. president's policy of squeezing Tehran, sources have told Reuters.

Iraq's oil ministry says oil exports from Kurdistan region through Turkish pipeline set to resume

Iraq's oil ministry said in a statement on Saturday that all procedures had been completed to allow the resumption of exports through the Iraq-Turkey pipeline. Iraq's oil minister said on Monday that oil exports from the semi-autonomous Kurdistan region will resume next week, resolving a near two-year dispute that has disrupted crude flows as ties between Baghdad and Erbil improve. US President Donald Trump's administration is putting pressure on Iraq to allow Kurdish oil exports to restart or face sanctions alongside Iran, sources have told news agency Reuters. An Iraqi official later denied pressure or the threat of sanctions. The federal government of Iraq and the Kurdistan Regional Government (KRG) held technical talks following the oil minister's statements earlier this week to iron out details necessary for the resumption of exports, such as a payment mechanism acceptable to oil companies. The Iraqi oil minister's announcement comes after the Iraqi parliament approved on February 2 a budget amendment that set a rate of $16 per barrel for oil transport and production costs in Kurdistan. The amendment also requires the KRG transfer its oil output to the state-run State Oil Marketing Organization (SOMO) The oil ministry in its Saturday statement asked the KRG to start delivering crude to SOMO in order for exports to resume.

BP’s Return to Kirkuk

Yerevan Saeed On January 15 in London, the Iraqi government and British Petroleum signed a long-awaited comprehensive energy agreement aimed at developing the northern oil fields of Kirkuk, which are estimated to contain proven reserves exceeding 9 billion barrels of oil. The deal marked a historic return for BP to Kirkuk, the oil-rich province where in 1927 the company, then the Anglo-Persian Oil Company, made its first oil discovery. The discovery not only influenced Iraq’s political history and economic development, but it has also exacerbated the conflict between the Kurds and successive Iraqi governments over Kirkuk. This BP deal threatens to aggravate a century-old source of contention between Baghdad and Erbil. The final technical and commercial details of the BP deal have yet to be disclosed, though reports suggest that it may be a $25 billion investment, making it the second-biggest energy investment after TotalEnergies’s $27 billion megadeal signed in 2023. The agreement includes the development of Kirkuk’s Baba and Avana Domes as well as three adjacent fields: Bai Hassan, Jambur, and Khabbaz. The rehabilitation of existing facilities, alongside the construction of new infrastructure, such as gas expansion projects and drilling to stabilize production and reverse decline in the Kirkuk fields, is also part of the deal. Although the 2018 letter of intent between the Iraqi Oil Ministry and BP included expanding production at the Khurmala Dome, controlled by the Kurdistan Regional Government and operated by the KAR Group since 2007, the status of the oil field in the deal remains unclear. Located about 22 miles southwest of Erbil, the Khurmala Dome produces about 150,000 barrels per day making it a vital revenue source for the KRG’s struggling economy amid budget cuts from Baghdad. If BP’s new deal with Baghdad includes Khurmala, the company risks becoming embroiled in Iraq’s volatile dispute over resource control. Such a move could exacerbate tensions between the KRG and the federal government. The BP project aims to stabilize and boost production at these strategically important oil fields. It will increase oil production from the current 300,000 b/d to 750,000 b/d, with a longer-term target of reaching 1 million b/d from Kirkuk fields. Such a boost in revenue streams will be important to support Iraq’s bloated public sector and fund key development initiatives. Additionally, the deal outlines plans to construct power plants that will generate electricity by utilizing associated gas from the oil fields to meet local energy needs. This electricity could lessen dependence on gas imports from Iran in the future and help Iraq to reach a key environmental goal: the elimination of gas flaring by 2028. On the surface, this agreement appears to be a major victory for Iraq, offering necessary cash for its struggling economy. However, the deal also risks exacerbating the long-standing conflict between the Kurdistan Regional Government in Erbil and the central Iraqi government in Baghdad, especially if the deal is implemented without consultation with Erbil. Kirkuk has always been a flashpoint for ethnic and political conflict, with both the Kurds and Iraq’s central government asserting claims to its sovereignty and resources. Prior to Iraqi Prime Minister Mohammed al-Sudani’s trip to London, his office had notified the KRG about the impending signing of the Kirkuk deal with BP. However, at the same time, Baghdad advised BP to engage in talks with the KRG only after the deal has been finalized. Given Kirkuk’s legal status and the Kurdish majority in the province, the KRG asserted its right to have a significant say in any major long-term energy agreements concerning the province. The KRG’s demand is clear: a seat at the table with BP and the Iraqi Ministry of Oil. The Kurdish population is apprehensive about energy deals in Kirkuk, particularly with BP, because of the experience of the discovery of oil by BP’s forebearer in newly British-founded Iraq. The extraction and commercialization of oil from Kirkuk in 1934 did not just stifle the hope of Kurdish autonomy, it laid the foundation for a century of oppression. The revenue generated by this oil wealth empowered successive Iraqi governments to systematically suppress the Kurdish population, using the resources to fuel a war on the Kurds. What began as a geopolitical and economic calculation by the British and the Anglo-Persian Petroleum Company reverberated through generations, trapping the Kurds in a cycle of marginalization and conflict. The new BP deal also repeats a dangerous precedent: a major foreign company entering the heart of a disputed province and aligning with one side engaged in a long-standing political and legal conflict. The interests of foreign corporations, particularly in resource-rich regions, have often had long-term ramifications that far exceeded the immediate economic benefits as has been the case in Aceh in Indonesia and the Biafra region in Nigeria, for example. BP’s decision to sign the deal without securing the consent of the KRG could deepen the divide between the central government and the Kurds, igniting tensions that could contribute to a fresh wave of conflict. In the past, the fate of major energy projects in Kirkuk was determined primarily by the exercise of power rather than through legal or political frameworks. BP’s path to the new deal in Kirkuk has been a long endeavor, with negotiations dating back to 2009. Progress has been consistently hampered by a multitude of factors, primarily the deeply strained political relationship between the KRG and Baghdad. Tensions were exacerbated by several other key factors: Kurdish political and military control of Kirkuk until October 2017, instability and security challenges in Kirkuk province, and the overall volatile environment for any major development projects on the national level. Kurdish dominance in the region hindered past efforts to reach a deal with BP. Now, Baghdad is asserting its power to finalize a deal. However, if this deal – concerning Iraq’s most contested province – is not handled carefully, it could have substantial detrimental consequences for political stability and economic development. A BP spokesperson said the agreement is not yet finalized, giving Baghdad the opportunity to meaningfully include the KRG, even if not as a direct partner. Including all relevant stakeholders will help to ensure the success of this mega-development project, protect it from future political or security upheavals, and contribute to the stability of Iraq as a whole.

Federal Supreme Court Rejects Appeals and Revokes Suspension of 3 Controversial Laws

Iraq's Federal Supreme Court decided on Tuesday to revoke its previous judicial injunction that had suspended the implementation of the three "controversial" laws: the General Amnesty Law, the Personal Status Law, and the Property Reclamation Law. At the same time, the court emphasized that any laws contradicting the constitution cannot be enacted. During a public session, the court president announced the dismissal of the legal challenge filed against the three laws. Judge Jassim Abboud Al-Amiri, President of the Federal Court, highlighted the role of the Constitution in defining the framework of government, the powers and limitations of authorities, and the protection of rights and freedoms. He explained that the Iraqi parliament, elected by direct vote, represents the people and has the authority to legislate and make decisions. Al-Amiri also referenced Article 37 of the parliament’s internal regulations, which states that a new agenda item cannot be discussed until the previous one is concluded. He emphasized that no law may contradict the Constitution, which is the supreme law of Iraq according to Article 13 of the 2005 Constitution.

Kurdistan oil exports to Turkey set to resume after landmark subsidy deal in Iraqi parliament

The Iraqi government, Kurdish authorities, and international oil companies have collectively welcomed a recent amendment to Iraq's federal budget, aimed at restarting oil exports from the Kurdistan Region through the Iraq-Turkey pipeline after a near two-year suspension. On Sunday, Iraq's parliament endorsed a budget amendment to subsidize production costs for international oil companies operating in the semi-autonomous Kurdistan Region. This adjustment raises the compensation rate to $16 per barrel, significantly higher than the previous rate of $7.9 per barrel for transport and production costs. The flow of oil through the Kurdistan Regional Government's (KRG) pipeline was halted by Turkey in March 2023 following an International Chamber of Commerce ruling that required Ankara to compensate Baghdad $1.5 billion for unauthorized exports by the KRG between 2014 and 2018, which led to an estimated loss of $19 billion in revenue for Iraq. In a statement, Basim Al-Awadi, spokesperson for the Iraqi government, relayed Prime Minister Mohammed Shia Al-Sudani’s appreciation for the "responsible and constructive step" taken by the Council of Representatives in approving the amendment. This measure, he said, bolsters political stability and showcases the high level of cooperation between the government and the Council of Representatives. Sudani called on both the Kurdistan Regional Government (KRG) and the Federal Ministry of Oil to immediately implement the amendment to optimize investment in natural resources, particularly oil. Masrour Barzani, the KRG Prime Minister, also supported the legislative change, thanking those who backed the amendment and the KRG negotiating team for addressing the salary issue. "I hope that this positive step in amending the budget law will be the beginning of resolving all other disputes and the federal government's commitment to provide financial entitlements of the Kurdistan Region," Barzani wrote on the X platform. What happens next? In cooperation with the KRG’s Ministry of Natural Resources, Iraq's oil ministry plans to hire an international consultant within 60 days to evaluate fair production and transportation costs. Should no consensus be reached, the Iraqi cabinet will independently appoint a consultancy. The budget amendment, proposed by Iraq's cabinet in November 2024, also requires that the KRG transfer its oil output to the state-controlled State Oil Marketing Organization (SOMO). The Association of the Petroleum Industry of Kurdistan (APIKUR) has welcomed this legislative change. Myles B. Caggins III, APIKUR spokesman, told The New Arab, "APIKUR welcomes the Iraqi Council of Representatives' budget law amendment and remains focused on reaching agreements to restore oil exports through the Iraq-Turkey Pipeline." Soran Omar, a lawmaker from the Kurdistan Justice Group in the Iraqi parliament, stated to TNA, "The Kurdistan Region's oil will be handed over to the SOMO company. In return, for 60 days, the region will receive $16 for each barrel of oil produced and delivered to SOMO." He added, "During the 60 days, an international company will be brought in to determine the actual cost of producing a barrel of oil in the region." "I hope both governments remain committed to implementing this agreement. The implementation will take place after its publication in the Iraqi Gazette. If the Kurdistan Region complies, it will receive its full budget and salaries," Omar continued. Khor Mor fire Separately, Sudani ordered the formation of a technical security committee to investigate the circumstances of a fire incident at the Khor Mor gas field in Sulaimaniyah Province. The Security Media Cell reported, "The incident led to a minor fire near the fuel tank which did not affect it, with no human or material losses, nor did it impact the operation and production of the field." Sudani ordered a security committee to investigate the incident, stressing that attempts to harm the economy and public welfare will not be tolerated, and security forces will take firm action against any threats. The Khor Mor gas field, located southwest of Sulaimaniyah, is being developed by the UAE's Dana Gas company and produces natural gas for almost 80 per cent of the Kurdistan region's power plants. The Sulaimaniyah-based General Directorate of Counter Terrorism, in a statement revealed that a suicide drone attack was directed at the Khor Mor gas field late on Sunday. "According to intelligence reports, the drone was launched from the Bashir area and was carried out by militia and outlaw groups. The attack did not result in any casualties or material damage, and both the field and the Dana Gas company are fully secured," reads the statement. It also added that security agencies assure citizens that they are closely monitoring this violation and will announce any new information regarding this matter. Four Yemeni nationals were killed and two others were wounded when a suicide drone hit the Khor Mor gas field in Iraq's semi-autonomous Kurdistan region late on 26 April. The KRG has blamed the attack on the Iran-backed militias in Iraq. Dana Gas (PJSC) announced that a drone targeted the vicinity of the Khor Mor gas field and confirmed that the attack caused no injuries or damage to production facilities, and operations continue uninterrupted under strict security protocols. Iraq heavily depends on imported gas from Iran to produce electricity, and recently Al-Sudani said his government is planning to purchase gas from the Khor Mor gas field and connect the field with power plants in Kirkuk via a new gas pipeline. Source: The New Arab

Iraq’s oil exports to US surge by 118,000 bpd in a week

Iraq's oil exports to the United States rose by 118,000 barrels per day (bpd) compared to the previous week, the US Energy Information Administration (EIA) announced on Sunday. According to the EIA data, US crude oil imports from top 9 countries averaged 5.981 million bpd last week, down by 92,000 barrels from the previous week's 6.073 million bpd. "Iraq's oil exports to the US reached 336,000 bpd, up by 118,000 bpd from the previous week's 218,000 bpd," it confirmed. The US's highest oil revenue last week came from Canada, averaging 3.716 million bpd, followed by Mexico at 521,000 barrels, Saudi Arabia at 417,000 barrels, and Venezuela at 319,000 barrels. The US also imported 283,000 bpd from Colombia, 114,000 from Brazil, 102,000 from Ecuador, and 92,000 from Nigeria.

Iraq makes huge oil discovery but faces Opec restrictions

Reuters Iraq has announced the discovery of a massive oil field expected to significantly increase the country’s hydrocarbon reserves, but Baghdad will face a number of challenges in its attempt to exploit the new resource. The field, located in the central part of the country, contains more than 2 billion barrels of medium and light crude oil, with a projected daily output of 5,000 barrels, according to the Iraqi news agency. Iraq, the second-largest Opec producer after Saudi Arabia, holds the world’s fifth-largest proven oil reserves, amounting to 145 billion barrels. This represents 17 percent of the Middle East proven reserves. Most of the country’s oil is in the southern Basra region, the Diyala region east of Baghdad, and north-eastern Kirkuk. The latest discovery is part of the south-eastern Baghdad field and was made in collaboration with EBS, based in China. Iraq’s goal is to boost its oil reserves to 160 billion barrels, as announced by oil minister Hayan Abdel Ghani last year and reported by Al Arabiya. Baghdad also aims to boost its oil production capacity to 6 million bpd by 2028. Iraq pumps 4 million barrels per day (bpd) of oil and has been singled out by Opec+ for its overproduction multiple times. The lack of compliance with quotas offsets the producer group’s efforts to push prices up. While its oil production is expected to rise by only 200,000 bpd by the end of 2026, under the Opec+ agreement Iraq has yet to compensate for overproduction since January 2024, which means that some existing fields will be constrained, according to analysts. “There is no space for new developments without cutting existing fields further,” James Forbes, London-based senior analyst for upstream oil at Facts Global Energy, told AGBI. Mohammed Shia Al-Sudani, Iraq’s prime minister, has said the country wants to ramp up exports and reduce its reliance on gas imports from its eastern neighbour Iran, which account for a third of its gas needs. But years of war, political instability, an inhospitable investment environment and rampant corruption have led to underinvestment in the sector. “There are also fiscal issues, as creating value from barrels is difficult,” Alexandre Araman, director at Wood Mackenzie, said. Western international companies have pulled back, and about one-third of Iraq’s proven reserves and two-thirds of current production are managed by Chinese companies. Oil exports represent more than 90 percent of Iraq’s state budget. The government is pushing to rebuild its economy while preparing for parliamentary elections this year. Since his election in 2022, Al-Sudani has been striving to regain the confidence of international investors, including introducing better contract terms for international oil companies compared to the previous technical service contracts. He has also engaged in diplomatic efforts with Iran’s geopolitical rivals, including a visit to Washington, although with limited success: US companies are cautiously re-entering Iraq’s energy sector. TotalEnergies of France was the first major to sign a significant $27 billion deal for multiple energy-related projects. BP of the UK signed a memorandum of understanding to rehabilitate and develop four oilfields operated by North Oil Company in Kirkuk. New Iraqi elections for the Council of Representatives—the country’s main legislative body—are scheduled for next year.

Iraqi Oil Ministry: There has been no cessation of crude oil exports to Syria

On Sunday, the Iraqi Oil Ministry refuted claims of having contracts to supply crude oil to Syria, dismissing reports about the cessation of Iraqi crude oil exports to its neighboring country. In an official statement, the ministry clarified, "The State Organization for Marketing of Oil (SOMO) confirms that there are no contracts with the Syrian side to supply them with crude oil. Consequently, there has been no cessation of crude oil exports to Syria." The ministry urged media outlets and interested parties to verify their information from official sources before publication. A day earlier, a source within the Iraqi Oil Ministry informed Shafaq News that crude oil flows to Syria had been halted following the fall of Al-Assad regime. Prior to the cessation, exports included approximately 33,000 barrels per day (bpd) of crude oil and 120,000 tons of black oil monthly.

US Secretary of State conveyed direct "threats" to Iraqi Prime Minister

US Secretary of State Antony Blinken conveyed direct "threats" to Iraqi Prime Minister Mohammed Shia Al-Sudani concerning Iran-backed armed factions in Iraq, informed political sources revealed on Saturday. "Blinken clearly and directly conveyed threats from Washington during his meeting with Al-Sudani regarding the armed groups’ future and their movements," according to the sources. Blinken emphasized that "the new US administration would work vigorously to eliminate any influence of these factions, especially after their cross-border operations targeting US bases in Syria and various targets inside Israel over the past period." "Blinken warned Al-Sudani against any military actions by these groups in Syria in the coming phase, driven by Tehran, and held the Iraqi government accountable for any actions taken by them," the sources continued, adding, "The US Secretary stressed the necessity of controlling the factions and genuinely disarming them in the coming phase, as they pose a threat to regional security, not just Iraq. Otherwise, Washington would play a role in curbing them through sanctions and specific military operations." On Friday, US Secretary of State Antony Blinken made an "unannounced" visit to Iraq, where he met with Prime Minister Mohammed Shia Al-Sudani. According to the US Department of State, Blinken urged the Iraqi government to support the democratic transition in Syria following the fall of Bashar Al-Assad's regime, highlighting Iraq's role in enhancing its sovereignty and regional stability. The US Department of State quoted Blinken during his meeting with Al-Sudani, reaffirming Washington's commitment to "supporting Iraq's security and sovereignty," stressing the need to continue efforts to "prevent the resurgence of ISIS." He noted that the positive changes witnessed in Iraq enhance its future success prospects and emphasized the importance of Iraq and regional countries in supporting Syria to achieve a comprehensive political transition that protects minorities and ends sectarianism.

Iraq Parliament Ends Year With No Kurdistan Oil Deal

The Iraqi parliament ended this year’s session without finalizing a deal with the semi-autonomous region of Kurdistan for the exports of crude oil from the northern region. According to local media, the deal was to be debated last Thursday, along with several other topics, but since then no update regarding any decision on the deal has been issued, suggesting the Iraqi parliament has delayed the final decision on the deal for January when the new parliamentary session will begin. One report by Shafaq said that the topic of Kurdish oil exports had led to a deadlock among members of parliament who could not reach an agreement about the compensation that Baghdad would owe the Kurdish government for the costs of producing and transporting the oil. The difference of opinion prompted the Kurdish parliamentarians to withdraw from the discussion, effectively ending it. One of the Kurdish members of parliament told Shafaq that the disagreement centered on the cost of oil extraction in Kurdistan. He also said that to settle the matter, “a specialized international company would visit the KRG's oil fields to assess the cost of oil extraction, in line with the budget law amendment and a political agreement between the two sides.” Deliveries of Kurdish crude oil have been suspended for over a year amid a dispute between the central government in Baghdad and Turkey over who had the power to authorize these deliveries. The impasse followed an International Chamber of Commerce ruling in March 2023. The ICC ruled in favor of Iraq, which had argued that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline and the Turkish port of Ceyhan without approval from the federal government of Iraq. The ruling had an impact on international oil companies operating in Kurdistan, which suspended operations until they had clarity on any changes in their terms of operation in the region. There was also a dispute between the government in Baghdad and the one in Erbil over these oil deliveries and who gets to keep the money from their sales on international markets. Most of these have been settled but the deal has yet to be finalized. By Charles Kennedy for Oilprice.com

The cost of producing a barrel of oil in the region is $20 to $25, but in Basra it is $4 to $5

A member of the Finance Committee of the Iraqi Parliament said "The cost of producing oil in the Kurdistan Region is $20 to $25 a barrel, while the cost of oil in Basra is $4 to $5 a barrel". Muain Kazemi, a member of the Finance Committee of the Iraqi Parliament, told PUK media: "The Iraqi government and the Kurdistan Regional Government (KRG) have agreed to increase the cost of oil production to $16". He said, "The cost of producing a barrel of oil in the Kurdistan Region is very high, between $20 and $25, but in Basra it is between $4 and $5." "The agreement between the federal government and the Kurdistan Regional Government (KRG) on the oil production of the Kurdistan Region, consists of exporting oil to the port of Ceyhan in Turkey, under the supervision of SOMO, which belongs to the Iraqi Oil Ministry," he said. He added, "In return, Iraq will pay oil production costs of $16 per barrel out of 400,000 barrels per day for the first phase, until the costs are reviewed in coordination with the Kurdistan Regional Government". He added, "The oil contracts between the Iraqi government and the Kurdistan Regional Government with oil companies will be reviewed because the cost of oil production is very, very high compared to Basra oil". On November 5, the Iraqi Council of Ministers approved the resumption of oil exports from the Kurdistan Region of Iraq after 19 months of suspension.

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Iraq’s oil exports to US surge by 118,000 bpd in a week

Iraq makes huge oil discovery but faces Opec restrictions

Iraqi Oil Ministry: There has been no cessation of crude oil exports to Syria

US Secretary of State conveyed direct "threats" to Iraqi Prime Minister

Iraq Parliament Ends Year With No Kurdistan Oil Deal

The cost of producing a barrel of oil in the region is $20 to $25, but in Basra it is $4 to $5

China's Path to 2035

Why the United States should stop supporting the Iraqi Kurdish Peshmerga

Kurdistan gas and diversification

Will Iraq Finally Revive This Mothballed Megaproject?

APIKUR Objects to the Ministry of Oil's Actions

Iraqi Oil Minister: Kurdistan Region sells 286,000 barrels of oil per day without our knowledge

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