Oil companies in Iraqi Kurdistan to resume production a month after agreement
An oil facility belonging to the Turkish company BOTAS. Photo: Reuters
Baghdad (IraqiNews.com) – The Iraqi Prime Minister, Mohammed Shia Al-Sudani, revealed on Tuesday that foreign oil companies operating in the Kurdistan region of Iraq informed the Iraqi government that they would resume oil production within a month once an agreement is reached on the costs of oil production.
Oil exports from northern Iraq through the Iraq-Turkey oil pipeline were suspended last March.
Turkey’s decision to suspend oil exports followed an arbitration decision issued by the International Chamber of Commerce (ICC) in Paris.
The decision obliged Turkey to pay Baghdad $1.5 billion in compensation for damages caused by the Kurdistan Regional Government’s (KRG) export of oil without permission from the federal government in Baghdad between 2014 and 2018.
The Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, confirmed earlier in October that the oil pipeline is ready to operate and that Ankara is getting ready to start oil export operations through Ceyhan port on the Mediterranean.
Senior officials in the Iraqi oil sector revealed this month that talks to resume oil exports from northern Iraq through the pipeline between Iraq and Turkey are still ongoing.
Al-Sudani also said that foreign companies operating in Iraqi Kurdistan believe that the production costs set by the Iraqi side are low and not commensurate with the production costs from oil fields in northern Iraq.
The Association of the Petroleum Industry of Kurdistan (APIKUR) mentioned in mid-October that the losses inflicted on the oil sector due to the suspension of the oil pipeline between Iraq and Turkey reached $7 billion.