APIKUR welcomes Iraq-Turkey pipeline readiness but emphasizes need for resolving contractual issues, citing $1 billion monthly revenue loss for Iraqis.

The Association of the Petroleum Industry of Kurdistan (APIKUR) welcomed the recent announcement by the Minister of Energy and Natural Resources of Turkey at ADIPEC in Abu Dhabi, with respect to the readiness of the Iraq-Turkey pipeline (ITP) and its resumption of operations.

APIKUR views this development as a crucial step towards the long-anticipated recommencement of international crude oil exports from the Kurdistan Region.

In a statement issued 3 October, APIKUR emphasized the importance of resolving outstanding contractual issues before its member companies can resume oil production for pipeline exports.

Myles B. Caggins III, spokesman for APIKUR, expressed concern over the ongoing delays in reopening the Iraq-Turkey pipeline and resolving the contractual entitlements issue.

He noted, “The delays in re-opening the Iraq-Turkey pipeline and resolving IOC contractual entitlements are costing Iraqis an estimated $1 billion per month in lost revenues. APIKUR members are keen to work with the Governments of Kurdistan and Iraq to reinstate these revenues and even increase them through maximizing production. We believe this can be done quickly and efficiently, after payment arrangements are agreed and existing contractual arrangements are respected.”

According to the production sharing contracts (PSCs) held by IOCs, they have the right to receive their respective shares of crude oil and can independently sell these entitlements. However, the lack of agreement on payment terms has forced APIKUR member companies to seek buyers who can guarantee timely payment, including upfront payments.

These PSCs are legally governed by English law, with dispute resolution procedures set out in international arbitration at the London Court of International Arbitration.

In August, APIKUR urged both the Iraqi federal government and the Kurdistan Regional Government (KRG) to uphold the contractual rights of International Oil Companies (IOCs) and ensure their inclusion in the execution of the budget and forthcoming hydrocarbon legislation.

APIKUR emphasized that the implementation of the recently approved Iraqi budget and the proposed oil and gas bill must safeguard IOCs’ entitlement to cost recovery and a share of profits.