Efforts to restart oil exports from the Kurdistan Region remain stuck, with key issues still unresolved — including the amount Iraq’s federal government will ultimately pay to the Kurdistan Regional Government (KRG) and the oil companies working in the region.
Although Baghdad has proposed a $16-per-barrel compensation rate for production costs under recent budget amendments, industry representatives say the figure is only a placeholder. A final rate will depend on the findings of an independent international consultant — a consultant who hasn’t even been selected yet.
Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), said Thursday that the companies had already submitted a list of internationally recognized firms to take on the evaluation. He stressed the need for transparency and clarity before any real progress can be made.
“We need to understand the scope of work for this consultant,” Caggins said. “The $16-per-barrel rate mentioned in the budget is temporary. The real cost — the actual, verified cost of producing and transporting oil — will be determined by this third party. But without a clear mandate, this process could drag on for years or produce results that neither the companies nor the KRG’s Ministry of Natural Resources agree with.”
The consultant’s job will be to review financial records, contracts, and production data from each oil field in the Kurdistan Region to arrive at an accurate figure for compensation — a critical step before exports can resume through the Iraq-Turkey pipeline, which has been idle since March 2023.
U.S. Pushes for Progress, But Talks Stall
Despite mounting pressure from the United States, a much-anticipated meeting in Baghdad on Thursday — which included Iraqi and Kurdish officials, oil companies, and a senior American diplomat — failed to produce a breakthrough.
“Nothing was achieved,” said one participant, who spoke on condition of anonymity. Still, they noted that there was someprogress: the parties agreed to form two working committees to begin addressing the unresolved issues early next week.
These committees are expected to tackle several critical topics:
- A sustainable framework for settling outstanding debts to oil companies
- A clearly defined mandate for the third-party consultant
- A transparent and fair payment system, whether through direct payments or in-kind compensation
Until those issues are ironed out, it appears oil exports from the Kurdistan Region will remain on hold — costing Iraq and the companies involved hundreds of millions of dollars each month.