Eight oil companies reach agreement with Iraq, KRG to resume oil exports

September 25 ------ Eight oil companies operating in Iraqi Kurdistan, representing over 90% of production, reached agreements in principle with Iraq's federal and Kurdish regional government (KRG) to resume oil exports, an industry umbrella group said.

The agreement would mark a breakthrough in the deadlock and allow around 230,000 barrels of crude a day to flow through the Iraq-Turkey pipeline, which has been suspended since March 2023. "This framework, once signed and implemented, should allow exports to restart in the coming days, while providing a path toward longer-term arrangements," the Association of the Petroleum Industry of Kurdistan (APIKUR) said in a statement. Two companies outside APIKUR - local KAR Group and Forza Petroleum - have also backed the agreement, sources told Reuters.

The agreed framework maintained "the sanctity of existing contracts" and provided surety of payment to the international oil companies, APIKUR said. DNO did not immediately respond to requests for comment. Genel Energy said it had no further comment.

On Tuesday, the two companies welcomed plans to restart the exports, but said some tweaks were still needed to the proposed terms, specifically to address KRG's arrears for past deliveries. Kurdistan has accumulated around $1 billion in arrears to producers. DNO's estimated share of overdue receivables is about $300 million. APIKUR said the KRG and IOCs also agreed to meet within 30 days of resuming exports to work towards creating a mechanism for settling the outstanding debts.

The Kirkuk-Ceyhan pipeline shut after the International Chamber of Commerce ordered Turkey to pay Iraq $1.5 billion in damages for unauthorized exports by the KRG. Turkey is appealing but says it is ready to restart the pipeline.

Source: reuters.com