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Türkiye announces the date for resuming the export of Kurdistan region’s oil via the Ceyhan line


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The Paris court opens the case of Al-Ikti.

 

policy |Today, 13:36 |

    
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Baghdad today - Erbil  

Time and again, the Patriotic Union of Kurdistan asserts that the oil file is managed by the Kurdistan Democratic Party, the largest party in the Kurdistan region.

 

The oil file is one of the thorny issues and obstacles between Baghdad and Erbil, and for years it has been the main point of contention between the two parties.

 

On March 23, 2023, the Arbitral Tribunal of the International Chamber of Commerce in Paris issued the final ruling in the arbitration case filed by the Republic of Iraq against the Republic of Turkey, for its violation of the provisions of the “Iraqi-Turkish Pipeline Agreement” signed in 1973, in favor of Iraq, which reinforces the point A national view of some Baghdad politicians. Does the Paris court or international courts care about the hatred between some fanatical politicians in Baghdad or Erbil? Or are the international courts interested in the facts and issues studied, and in this way the politicians of Iraq are supposed to deal with their external problems.

 

The text of the agreement

 

The agreement signed between the two neighboring countries (Turkey and Iraq) stipulates that "the Turkish government must comply with the instructions of the Iraqi side regarding the movement of crude oil exported from Iraq to all storage and disposal centers and the final station."

 

The ruling issued by the International Arbitration Commission, according to a statement by the Iraqi Ministry of Oil, "obligates all parties to respect international agreements and conventions in this regard," and confirms, "The Ministry of Oil, through the Iraqi Oil Marketing Company, SOMO, is the only entity authorized to manage export operations through the Turkish port of Ceyhan."

 

The joy of the national union

 

Despite being a key partner in governance in the Kurdistan region and the second largest party in the region, manifestations of joy have become evident for the Patriotic Union of Kurdistan, which runs the entire provinces of Sulaymaniyah and Halabja, on the recent decision issued by the Paris court.

 

A decision like this is considered by the Patriotic Union of Kurdistan as a blow to its rival and rival, the Democratic Party, as the party led by Masoud Barzani will lose financial support and relations that were built on the basis of oil with Turkey.

 

A member of the Patriotic Union of Kurdistan, Salih Faki, says that the oil file in the Kurdistan region is confined to the hands of the Kurdistan Democratic Party, specifically Prime Minister Masrour Barzani.

 

Noting in his interview with Baghdad Today that "the National Union does not possess high positions in the Ministry of Natural Resources and does not even have a general director in this ministry responsible for the oil file in the region."

 

monopolization of power

 

He added, "One of the reasons that made the ministerial team of the Kurdistan Regional Government suspend its work in the region's cabinet is the monopoly of power by the democrat to manage sensitive files and the lack of a real partnership."

 

However, Dilshad Shaaban, a member of the Kurdistan Democratic Party, speaks differently and asserts that it is shameful to count any decision targeting the Kurdistan region as being against democracy only.

 

In his interview with Baghdad Today, he added that "the most affected by all the decisions taken in the past period is the Kurdish citizen and the constitutional entity of the Kurdistan region, especially since there are those who want to overthrow this entity and abuse it."

 

He explained, "The decision issued by the Paris court was expected, but the dealings of the Kurdish parties and parties is the sad matter, as the Kurdish experience needs everyone to come together to preserve the achievements that have been made."

 

And the Federal Supreme Court in Iraq issued, on February 15, 2022, a ruling stating that the oil and gas law of the Kurdistan Regional Government, issued in 2007, was unconstitutional, and canceled for violating the provisions of constitutional articles, as well as obligating the region to hand over oil production to the federal government, and the unconstitutionality of sending the federal cabinet Sums of money to finance the monthly salaries of employees and workers in the public sector in the Kurdistan region.  

Various political parties accuse the ruling parties in Kurdistan of smuggling large quantities of oil, and the lack of transparency in this file.

 

No transparency in the oil file

 

The resigned member of the Kurdistan Parliament, Ali Hama Salih, says that in a post on his social media page, the oil file is one of the biggest corruption files in Kurdistan.

Stressing that, there is no transparency in this file, and no oversight or parliamentary body can look at the volume of exports and the financial revenues achieved from the sale of oil.

 

Popularly, many journalists, activists, and citizens expressed their happiness and joy with the decision issued by the Paris Court, which makes the region's oil exports confined to Baghdad.

 

In light of the foregoing, and the central decisions binding the region, global oil prices have recovered, due to the decision to prevent the export of Kurdistan's oil to Turkey through the port of Ceyhan.

 

 

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5013876.jpeg?h=3ca652f7&itok=kPdnZIxv

 
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At least three oil companies operating in the semi-autonomous Kurdistan region of northern Iraq suspended or reduced their oil production on Wednesday, following the suspension of oil exports from a pipeline in northern Iraq, with more disruptions expected in the future.
Iraq was forced to suspend about 450,000 barrels per day of crude exports, or 0.5 percent of global supplies, from the Kurdistan region on Saturday through a pipeline extending from the Kirkuk oil fields in the north of the country to the Turkish port of Ceyhan. The stoppage contributed to an increase in oil prices in the past days, to return to about $80 a barrel.
Turkey stopped pumping Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Ankara had violated a joint agreement by allowing the KRG to export oil to the port of Ceyhan without Baghdad's consent.
Oil companies operating in the Kurdistan region were forced to stop production or transfer production to storage tanks, and many say they will reach their maximum capacity within days, as talks continue between Turkey, Baghdad and the Kurdistan Regional Government to resume exports.
The Norwegian company, DNO, said on Wednesday that it had started suspending its production in the Tawki and Bishkabir fields, as production averaged 107,000 barrels of oil per day in 2022, which represents a quarter of the total Kurdish exports.
Genil Energy, a partner in the two fields, said: “Bishcapper production was suspended yesterday night, and plans are in place for a deferred maintenance. Production has started to be suspended from Taoke, but it will take an extra day or so.”
Canada-based Forza Petroleum, whose former name is Oryx Petroleum, was forced to suspend production earlier this week from the Howler license, which produces 14,500 barrels per day and averaged production in January and February of 13,700 barrels per day.
Genel said remaining assets in the Kurdistan region continue to flow into storage tanks. A spokesman for the company said, on Wednesday, that production from the Sirta field can flow into storage tanks until the end of the week, while storage tanks from the Taq Taq field can absorb production until about April 21. The two fields produced 4,710 barrels per day and 4,490 barrels per day, respectively, last year.
Gulf Keystone cut its production at the Sheikhan oil field, which previously produced about 55,000 barrels per day, and the company said on Monday that it would suspend production after a few days. The company declined to comment on current production levels.
Dallas-based HKN Energy, the company that operates the Sarcing concession, said on Monday it would suspend operations "within a week if no solution is found" as its storage tanks near capacity. The concession area produced 43,048 barrels per day in the fourth quarter of last year.
(Reuters)
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'Immediate solution'

Sources: Nechirvan Barzani sends a message to the Sudanese regarding the suspension of oil in the Kurdistan region

Sources: Nechirvan Barzani sends a message to the Sudanese regarding the suspension of oil in the Kurdistan region
 

  

Baghdad - Nas   

The President of the Kurdistan Region, Nechirvan Barzani, sent a long letter to Prime Minister Mohammed Shia Al-Sudani, regarding the suspension of oil from the Kurdistan Region.  

  

  

According to statements by sources close to the presidency of the region, followed by "NAS", (March 29, 2023), "the president of the Kurdistan region in his message to an immediate solution to the issue without depriving the Kurdistan region of its constitutional rights."  

  

"In addition, Nechirvan Barzani spoke in detail about the legal and constitutional rights of the Kurdistan Region and said that what the Kurdistan Region has done in the past few years has been constitutional," the sources added.  

  

Turkish Energy Minister Fatih Dönmez on Wednesday denied that Turkey was fined $1.4 billion in the international arbitration award case.  

  

When asked whether his country had been fined $ 1.4 billion, the Turkish Minister of Energy said in a statement to his country's media affiliated with "NAS", (March 29, 2023), that "there is no such amount... There is a long report that mentions several sanctions, but not unilateral sanctions."   

  

"Four of the five sanctions requested by Iraq were rejected and one was accepted," he said.   

  

"We had our own demands. Five of our six applications were accepted and one was rejected. On that basis, our lawyers and friends are evaluating these sanctions."   

  

"Of course, there is an agreement between us and the Iraqi government. In accordance with international law and the report prepared by the International Court of Arbitration, we play a constructive role. Time will show this fact."   

  

Earlier, the Turkish Ministry of Energy and Natural Resources commented on the decision of the international arbitration panel on the export of oil from the Kurdistan region to Turkey.  

  

The ministry said in its statement, which was seen by NASS, (March 28, 2023), that "Iraq's victory in the oil case before the Judicial Committee of the International Chambers of Commerce based in Paris is a known necessity."   

  

In fact, this case reflects the conflict between the Iraqi central government and the Kurdistan Region of Iraq, which is a constitutional unity and has been going on for years, and our country has always respected the unity and integrity of Iraq.   

  

"Our country has spent billions of dollars since 1973 to keep the Iraqi-Turkish oil pipeline running despite regional instability, and has taken diplomatic measures to resolve differences with the parties and countries concerned," the ministry said.   

  

The Paris Judicial Commission rejected four of the five Iraqi requests, the statement said.   

  

"Turkey is ready to apply international law as before. It is also ready for all efforts between the main parties to the conflict to reach a lasting solution."   

  

  

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Parliamentary action on political leaders to legislate a law before presenting it to Parliament

  •  Time : 2023/03/29 17:14:38
  •  
Parliamentary action on political leaders to legislate a law before presenting it to Parliament
  
{Politics: Euphrates News} The Parliamentary Oil and Energy Committee revealed on Wednesday that it has begun moving on political leaders to legislate the oil law before presenting it to the House of Representatives.

A member of the committee, Adnan Al-Jabri told Al-Furat News that: "The visit of the delegations of the Kurdistan region to Baghdad after the decision of the Paris Court, which stopped the export of the region's oil to Turkey, will be an important incentive for the region and the government to reach understandings on the approval of the oil and gas law."
Al-Jabri pointed out that "the committee has now started its tours of political leaders to facilitate the legislation of this law and reach understandings before presenting it to the House of Representatives, considering that this decision will lead to losses for the region first and the government second."

By: Raghad Daham

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Oil firms halt or reduce output in Iraqi Kurdistan, further outages loom

Miran-field-in-Kurdistan-Region-800x450.

A rig at the Miran field, which is operated by London-listed Genel Energy. (Photo: Genel Energy via Iraq Oil Report)

SULAIMANI (ESTA) — At least three oil licenses in the semi-autonomous Kurdistan region of northern Iraq are shut in or running at reduced rates on Wednesday following a halt to the northern export pipeline, company statements showed, with more outages on the horizon.

Iraq was forced to halt around 450,000 barrels per day (bpd) of crude exports, or half a percent of global oil supply, from the Kurdistan region (KRI) on Saturday through a pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan.

The stoppage has helped boost oil prices in recent days back to near $80/bbl.

Turkey stopped pumping Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Turkey had violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil to Ceyhan without Baghdad’s consent.

Oil firms operating in the KRI are being forced to halt output or move production into storage, which many say will reach capacity within days, as talks drag between Turkey, Baghdad and the KRG to resume exports.

Norwegian oil firm DNO (DNO.OL) said on Wednesday it had begun shutting down production at its Tawke and Peshkabir fields, where production averaged 107,000 barrels per day (bpd) last year. This represents a quarter of total Kurdish region exports, DNO said.

Genel Energy , a partner in the fields, said: “Peshkabir production was halted last night and plans drawn up to conduct deferred maintenance. Tawke production shutdown has started but will take an additional day or so.”

Canada-based Forza Petroleum (FORZ.TO), formerly Oryx Petroleum Corp, was forced to shut in production earlier this week from the 14,500 bpd Hawler license, which produced an average 13,700 bpd in January and February.

Genel Energy’s remaining assets in KRI continue to flow into storage, the firm said. Production from its Sarta field can flow into storage until the end of the week, while tanks can hold production from Taq Taq until around April 21, a company spokesperson said on Wednesday. The fields produced a respective 4,710 bpd and 4,490 bpd last year.

Gulf Keystone has reduced production at the Shaikan oil field, which previously produced around 55,000 bpd, and said on Monday it would suspend production after a few days.

Dallas-based HKN Energy, which operates the Sarsang block, said on Monday it would shut in operations “within a week if no resolution is reached” as its storage facilities approach capacity. The block produced 43,048 bpd in the fourth quarter of last year.

(Esta Media Network/Reuters)

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Crude oil prices today - Oilprice.com

BREAKING NEWS:

 

 

Oil Prices Climb As Iraq's Dispute With Kurdistan Escalates

By Charles Kennedy - Mar 29, 2023, 3:07 AM CDT

An oil dispute between the Iraqi government and the semi-autonomous Kurdistan region that also involves Turkey has escalated this week, pushing oil prices higher.

Brent crude is inching closer to $80 and WTI was above $73 per barrel at the time of writing as Kurdish oil flows remain shut in for the fourth day in a row.

The dispute flared up last week, leading to the Iraqi government shutting down oil exports from Kurdistan to Turkey. The shutdown followed an International Chamber of Commerce court ruling in favor of Baghdad in a case against Turkey that claimed that the latter should not have allowed for the flow of oil from Kurdistan to Ceyhan without the express approval of the government in Baghdad.

Initially, Turkey said it would abide by the court's decision but this week, the Turkish Ministry of Energy and Natural Resources said in a statement that the court had in fact ruled that Iraq should compensate Turkey for violating an oil export deal the two countries had.

In the statement, the Turkish ministry said that the ICC had dismissed four of Iraq's five claims against it while accepting most of Turkey's claims.

 

Kurdistan exports about 400,000 bpd via the pipeline that connects Iraq with Turkey. Currently, the government of the semi-autonomous region is discussing next steps with Baghdad but an agreement has yet to be reached.

Iraq has stated it is very much in favor of restarting oil exports from Kurdistan but it has suggested it would only agree to that on its own terms. These terms involve the state oil company of Iraq, SOMO, being in charge of the exports, rather than the Kurdish government.

"The best way for oil to get exported through SOMO and for the Kurdistan Region to get its share," a spokesman for the Iraqi oil ministry told Rudaw on Tuesday.

These are just the most recent events in a long battle for control over the oil resource of Kurdistan between the region's government and the government in Baghdad.

By Charles Kennedy for Oilprice.com

 

Charles Kennedy

Charles is a writer for Oilprice.com More

 

 

COMMENTS

  • Mamdouh Salameh - 29th Mar 2023 at 3:42am:
    A dispute between the Federal government of Iraq and Iraqi Kurdistan affecting the export of 400,000 barrels a day (b/d) is hardly big enough a factor to cause oil prices to climb. At best it will play a supporting role.

    Prices are rising because the markets are realizing that the banking crisis is virtually at end and because of growth prospects of Asian economies expected to outstrip their Western counterparts aided by slightly cheaper Russian crude supplies, lower inflation than Western economies and Asian Central banks coming to the end of financial tightening.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
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Citibank: A political agreement will be made soon on Kurdistan's oil

6 hours ago
 
Oil prices declined this morning (Thursday, 30-3-2023) and the oil market was no longer affected by the loss of 400,<> barrels of oil per day. "A political agreement will be made soon on the oil of the Kurdistan Region," said City Bank.
 
Brent oil prices dropped 37 cents this morning, traded at 77 us dollars and 91 cents a barrel, and each barrel of Texas light oil dropped 28 cents, traded at 72 dollars and 69 cents.
 
Experts at Citibank, one of america's largest banks, believe the impact of the Kurdistan Region's oil loss on the oil market will disappear sooner than expected.
 
"Changes in Iraq's internal politics may soon lead to a political agreement," said Citibank. "This could lead to an increase in the volume of oil exports through pipelines by 200,<> barrels per day," he said.
 
Oil companies in the Kurdistan Region have begun closing their oil wells due to limited store capacity.
 
So far, Norway's DNO has announced that it has closed its oil wells, and Ganal Enerj has announced that it can continue to store oil for three weeks.
 
The US company HKN has also announced that it must either continue producing oil and oil to local refineries with the consent of the Ministry of Natural Resources, or it will have to close its oil wells.
 
As for other factors that have affected the decline in oil prices today, the dollar's value is rising against other currencies, which has led to a decline in the price of goods and minerals.
 
On the other hand, according to the US Energy Information Administration, the volume of oil stored in the US has decreased and oil imports have reached their lowest level in the past two years, causing today's drop in oil prices to be limited.
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Advisor at the Ministry of Oil to Rudaw: The meetings of the delegation of the Kurdistan Region in Baghdad achieved good results

an hour ago
 
An official in the Iraqi Ministry of Oil confirmed that the meetings between the delegation of the Kurdistan Region and the Iraqi Oil Marketing Company - SOMO, are continuing and have achieved good results.
 
Abdul Baqi Khalaf, advisor to the Iraqi Ministry of Oil, told Rudaw Media Network on Thursday (March 30, 2023) that "the meetings of the delegation of the Kurdistan Region, the Ministry of Oil and SOMO are continuing, and the results of the talks were good and there is an understanding" between the two sides.
 
For his part, an official in the Ministry of Oil, who declined to be named, told Rudaw Media Network today that Iraq does not want to lose its share of oil exports, and if the export stops, the loss will be for the whole country, stressing the need to solve this issue in a positive way that is in the interest of all.
 
He pointed out that the issue is related to the marketing and supervision of the Sumo Oil Company, expressing his belief that this issue will be resolved, and the export of oil will resume in the Kurdistan Region.
 
This is the second visit of the Kurdistan Region delegation to Baghdad in a week, to resolve the issue of oil exports through Turkey, without the talks it held with the Ministry of Oil and SOMO Company resulting in a formal agreement until Alan.
 
On March 23, 2023, the Paris arbitral tribunal of the International Chamber of Commerce issued the final award in the arbitration case filed by the Republic of Iraq against the Republic of Turkey, for violating the provisions of the "Iraqi-Turkish Pipeline Agreement" signed in 1973, in favor of Iraq.
 
The agreement signed between the two neighboring countries stipulates that "the Turkish government must comply with the instructions of the Iraqi side regarding the movement of crude oil exported from Iraq to all storage and drainage centers and the final terminal."
 
The Iraqi Ministry of Oil welcomed the decision, stressing that it will discuss mechanisms for exporting Iraqi oil through the Turkish port of Ceyhan with the concerned authorities in the Kurdistan Region and with the Turkish authorities.
 
On the other hand, the Turkish Ministry of Energy announced on (March 28, 2023) that the International Court of Arbitration rejected 4 out of 5 demands submitted by Iraq, and demanded that it pay compensation to Turkey.
 
The ministry stressed that Turkey will abide by international laws as usual, pointing out that the case is "a reaction to a years-long dispute" between the Iraqi federal government and the Kurdistan Regional Government over the sharing of oil revenues.
 
Norway's DNO, which produces 107,<> barrels of oil per day in Tauki and Fishkhabour, announced that it had started shutting down its wells for lack of storage space, a move other companies have also taken for the same reason.

 

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Sources: Nechirvan Barzani sends a message to Al-Sudani regarding the suspension of the Kurdistan region's oil
 

Baghdad - Nas   

The President of the Kurdistan Region, Nechirvan Barzani, sent a long message to Prime Minister Muhammad Shia Al-Sudani, regarding the suspension of oil from the Kurdistan Region.  

 

  

  

According to statements by sources close to the presidency of the region, followed by "NAS" (March 29, 2023), "the President of the Kurdistan Region, in his message to an immediate solution to the issue without depriving the Kurdistan Region of its constitutional rights."  

  

The sources added, "In addition, Nechirvan Barzani spoke in detail about the legal and constitutional rights of the Kurdistan Region and said that what the Kurdistan Region did in the past few years was constitutional."  

  

Turkish Energy Minister Fatih Donmez denied, on Wednesday, that Turkey had fined $1.4 billion in the case of the international arbitration award.  

  

When asked if his country had been fined $1.4 billion, the Turkish Energy Minister said in a statement to his country’s media, followed by “NAS” (March 29, 2023), that “there is no such amount.. There is a long report that mentions several penalties, but Not unilateral sanctions.    

  

He added, "Four of the five sanctions requested by Iraq were rejected, and one was accepted."    

  

He continued, "We had our own demands. Five of our six requests were accepted and one was denied. On this basis, our lawyers and friends are evaluating these penalties."    

  

He pointed out, "Of course, there is an agreement between us and the Iraqi government. According to international law and the report prepared by the International Court of Arbitration, we play a constructive role. Time will show this fact."    

  

The Turkish Ministry of Energy and Natural Resources commented, earlier, on the decision of the international arbitration panel on the export of oil from the Kurdistan region to Turkey.  

  

The ministry said in its statement, which was seen by "NAS" (March 28, 2023), that "Iraq's victory in the oil case before the Judicial Committee of the International Chambers of Commerce, based in Paris, is a known and necessary matter."      

  

In fact, this issue reflects the conflict between the Iraqi central government and the Iraqi Kurdistan region, which is a constitutional unity that has been going on for years, and our country has always respected the unity and integrity of Iraq, according to the statement.      

  

The ministry said, "Our country has spent billions of dollars since 1973 to keep the Iraqi-Turkish oil pipeline in operation despite regional instability, and it has taken diplomatic measures to resolve differences with the parties and countries concerned."      

  

The Paris Judicial Committee rejected four of the five Iraqi requests, according to the statement.      

  

The statement concluded, "Turkey is ready to apply international law as before. It is also ready for all efforts between the main parties to the conflict to reach a permanent solution."      

  

  

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An American center that evaluates the results and repercussions of international arbitration over Kurdistan oil
 

Baghdad - Nas  

The American Center for Strategic and Security Studies published on its website its assessment regarding the results of international arbitration against the semi-autonomous Iraqi Kurdistan Regional Government (KRG) regarding its independent oil export.  

  

  

  

The center's report stated in its evaluation, which was followed up and translated by "NAS", (March 30, 2023), that the decision will harm the oil industry in the Kurdistan Regional Government and its investors, and will give Baghdad enough influence to make more changes to the regulatory environment for oil and gas in the region.  

  

The following are the highlights of the analytical evaluation:  

  

On March 23, the International Court of Arbitration of the International Chamber of Commerce ruled that the KRG cannot export oil through a pipeline system that runs through Turkey to the Mediterranean port of Ceyhan without Baghdad's approval.  

  

At the request of the Turkish government in the wake of the ruling, the Kurdistan Pipeline Company stopped the flow of oil through the pipeline, forcing the largest oil producers in Iraqi Kurdistan - DNO, Genel Energy and Gulf Keystone Petroleum - to divert the flows to storage tanks.  

  

On March 26, Iraqi officials and the Kurdistan Regional Government began discussing the resumption of oil exports in the region (450,000 barrels per day), but on March 27, Bloomberg reported that the talks collapsed without agreement. KRG oil producers are expected to deplete storage facilities within days, after which they will have to shut down oil production, DNO announced on March 29. DNO's assets produced nearly a quarter of the KRG's oil in 2022.  

  

The ruling reinforces Baghdad's efforts to control more of the oil and gas sector in the Kurdistan Regional Government, which will force the Kurdistan Regional Government to reach a settlement that is likely to be in favor of Iraq.  

  

The level of autonomy that the KRG enjoys over its own oil industry has been in legal uncertainty for many years due to disagreements over the interpretation of several articles in Iraq's 2005 constitution. In 2007, the KRG exploited this uncertainty to pass the Oil and Gas Law, Who created the production sharing contracts that KRG oil producers use today.  

  

Baghdad was able to undermine most of these contracts in 2007 because it controlled all the major oil pipeline infrastructure that the KRG could use to export any oil produced, which means that the federal government still has significant influence over the region. But in 2013, the new KRG-Turkey pipeline was completed directly, bypassing Iraq's infrastructure and enabling the KRG to export oil independently.  

  

Baghdad, in response to the region, launched an arbitration case in 2014, saying that the Kurdistan Regional Government could not export oil without Baghdad’s approval. In February 2022, Iraq's Federal Supreme Court ruled the 2007 KRG law unconstitutional, leading Baghdad to threaten legal action against oil companies still operating in the region's oil sector.  

  

The March 23 ruling adds the weight of international law to the Supreme Court's domestic ruling, which would give Baghdad enough legal weight to significantly disrupt the KRG's oil sector. At this point, the KRG should reach a settlement with Baghdad that would likely involve significant concessions, including the rights to the oil fields themselves.  

  

Baghdad's increasing control over the KRG's oil sector after the March 23 ruling will fuel the government's efforts to curb any hints of separatism or federalism that threaten (and continue to threaten) Iraqi sovereignty in all of its geographic areas.  

  

The majority of Iraq's oil comes from southern Iraq, where some local leaders in provinces including Basra and Dhi Qar have alluded over the years to the federal separation of Iraqi provinces from the central government, something Baghdad wants to prevent.  

  

Baghdad's greater economic influence in the semi-autonomous region may undermine the influence of the main Kurdish political party in the KRG ahead of the upcoming elections in the region. Without the ability to independently market oil and generate oil revenue from Kurdish fields thanks to court rulings in February 2022 and March 2023, the KRG economy (and the politicians who run it) have no choice but to remain heavily dependent on federal government budgetary appropriations to foot the sector's salary bill. Large year in the region and the salaries of the security forces. This apparent weakness could hurt the popularity of the ruling Kurdistan Democratic Party, which negotiated the 2013 construction and export pipeline with Turkey, as well as a tug-of-war with Baghdad over budget funds. So.  

  

Later elections in 2023 could see the KDP lose some ground to its main rival, the Patriotic Union of Kurdistan.  

  

Ultimately, the Iraqi federal government may have the ability to dictate new investment terms for international oil and gas companies (IOCs) operating in the Kurdistan region. Successive Iraqi governments have long asserted that PSCs with the KRG, which are largely seen as internationally competitive, are illegal because under Iraqi law, PSCs are prohibited, and the federal government has instead offered its oil reserves through More restrictive technical service contracts.  

  

With the growing influence of Baghdad in the oil sector of the Kurdistan Region, it is likely that the federal government will try to divert or expel foreign oil companies operating in the sector according to the KRG model. While this would be disabling for companies currently operating in Kurdistan, as they would have to accept less competitive terms or withdraw from the region.  

  

Baghdad's greater control over the KRG's oil and gas sector will increase the confidence of international oil companies in the legal framework for oil investment in the region, which could lead to more investment from new companies. Baghdad's greater control over Kurdistan's oil and gas reserves would also make it easier for the federal government to develop other oil and gas reserves in northern Iraq.  

  

Before Baghdad can access these potential benefits, it will need to negotiate the fine print of the settlement with the KRG, such as changes to revenue-sharing processes. With this, Baghdad and the KRG could reach a short-term interim agreement in the coming weeks to resume production.  

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Source : Reuters
An oil field in Iraqi Kurdistan
An oil field in Iraqi Kurdistan
Trade sources told Reuters today, Thursday, that the suspension of oil exports from Iraqi Kurdistan has halted the payment of six billion dollars in oil shipments owed by the semi-autonomous Iraqi region to energy companies, including Vitol and Petraco.
 
And the export of 450,000 barrels of oil per day from Iraqi Kurdistan to the Turkish port of Ceyhan on the Mediterranean was suspended on Saturday, after Iraq won an arbitration case in which it said that Turkey had violated an agreement when it allowed Iraqi Kurdistan to export oil without Baghdad's approval.
 
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Oil rises as Iraqi Kurdistan's exports halt

Oil rises as Iraqi Kurdistan's exports halt

Information/follow-up.Oil prices rose on Thursday after a surprise drop in US crude inventories and halted exports from the Kurdistan Region of Iraq were met with a less-than-expected drop in Russian supplies.
By 1145 GMT, Brent crude futures were up 49 cents, or 0.63 percent, at $78.77 a barrel. US West Texas Intermediate crude rose 58 cents, or 0.79 percent, to $73.55 a barrel.The Energy Information Administration said on Wednesday that US crude oil inventories unexpectedly fell in the week ending March 24 to their lowest level in two years.
Crude inventories fell by 7.5 million barrels, while analysts polled by Reuters had expected a 100,2360-barrel increase.Prices were further supported by the continued suspension of exports from northern Iraq.
Producers in northern Iraq's semi-autonomous Kurdistan region have suspended or reduced oil output following a halt to oil exports from a pipeline in northern Iraq, with more disruptions expected in the future, company data showed.But Citi analysts said on Thursday that support from Iraqi Kurdistan could fade faster than expected.
"Changes in Iraq's domestic policy may lead to a lasting political settlement in the near future," they said, estimating that pipeline plan flows (TADAWUL:200) could increase by about 300,500 barrels per day.These factors offset the downward trend after a smaller-than-expected drop in Russian crude oil production in the first three weeks of March.
Sources familiar with the data told Reuters production had fallen by 25,<> bpd, compared with a target cut of <>,<> bpd, or about <> percent of Russian output. Finished/<>hr

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ERBIL (Kurdistan 24) – On Wednesday, Dr. Jotiar Adel, the Kurdistan Regional Government (KRG) Spokesperson, told Kurdistan 24 that there is good understanding between Erbil and Baghdad.

Both Erbil and Baghdad are eager to reach an agreement to re-export oil from the Kurdistan Region. He also said the suspension of oil exports from the Kurdistan Region following the decision of the International Chamber of Commerce will harm the oil industry.

Moreover, the spokesperson explained that KRG in an effort to diversify its economy, developed other sectors such as agriculture, industry, tourism, and investment.

At Baghdad’s request, Turkey halted the export of oil through its Ceyhan port on the Mediterranean on Saturday. The KRG was exporting nearly 400,000 bpd while Baghdad was sending 70,000 barrels a day through the pipeline.

The Kurdish government is currently in talks with Baghdad to find a new mechanism to resume exporting oil following the court ruling.

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Disclosure of the debts of the Kurdistan region after stopping its oil exports

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Baghdad - Iraq today:

The Kurdistan Region of Iraq received $6 billion in advance from a number of companies in exchange for crude oil, but oil exports have now stopped, according to Reuters.

The agency quoted several trade sources as saying that the suspension of oil exports from Kurdistan means that the region “cannot pay its six billion dollar debt by supplying it with crude oil.” There is no alternative plan to repay the loans.

On Saturday, March 25, the International Arbitration Court in Paris stopped exporting 450,000 barrels of oil from the Kurdistan region to Turkey. Iraq won an arbitration case in which it said Turkey violated an agreement by allowing the Kurdistan region to export oil without Baghdad's approval.

According to commercial sources told Reuters, the two international trading companies, Vitol and Petraco, which are part of the two companies, paid about 750-800 million dollars in advance to the Kurdistan region in exchange for crude oil.

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What will be the fate of producing 500,<> barrels of Kurdistan's oil?

2 hours ago
Last year (2022), the Kurdistan Region sold 144 million, 655,614 barrels of oil. That is, 396,310 barrels of oil per day. While the total production of all 13 oil fields is 158 million, 310,152 barrels of oil, it produces 433,726 barrels of oil daily from all fields, but because of its decision The International Court of Arbitration in Paris, which belongs to the International Chamber of Commerce, whose details or contents are still unclear, will be gradually revealed, with both sides considering themselves winners and demanding compensation.
 
On the other hand, the Kurdistan Region is moving towards closing most of the oil fields, including those where gas is produced, except for oil and gas wells given to refineries and electricity production stations in the Kurdistan Region.
 
The total losses from the decision, based only on the oil process, are more than 34 million dollars a day, and the damage caused by the Kurdistan Region's oil revenues alone is more than 15 million and 500,<> dollars!
 
We should also point out that the oil fields that have been producing gas in the past have now been suspended from their oil fields, which will affect the electricity supplied to them, particularly in Duhok and Garmian.
 
Here, and with data, we will focus on the losses of closing or stopping oil and gas production in the oil fields that exist in the Kurdistan Region, and we will focus more on the approach of oil production only for filtering. The role of countries such as Russia and the UNITED STATES in bringing Erbil and Baghdad closer is due to the situation that has come as a result of the ICC's decision that both sides of the request are demanding compensation and consider themselves winners.
 
Approaching oil production only for filtering?
 
The total number of oil blocks in the Kurdistan Region, from which oil is produced, is 13 blocks and oil fields across the border of the Kurdistan Region, including the Tauke, Peshtar, Sarsang, Atroush, Shekhan, Ain Sfin, Sarta, Erbil, Kalak, Khurmela Dom, Taqtaq, Kormur, Qaradakh and Sarqala, as well as the Nababawi oil fields.
 
According to oil companies and information, all oil fields have taken steps to stop oil production or close oil fields, after their storage capabilities have been limited, some of which produce gas. As in the Tauke, Peshtar, Atrush, Shekhan, and other oil fields, they have gone on to stop or reduce production due to lack of storage capacity. Meanwhile, most oil fields are directly linked to pipelines or tankers to export and use pipelines.
 
After the Tauke and Peshmerga oil blocks, The Kurdistan Region's main oil field is Khurmala, which has now stopped producing in some wells and closed it, and has lowered production levels only for filtering, after the warehouses filled.
 
There are four major oil refineries in the Kurdistan Region, but there are small informal refineries in all cities. The main refineries are Kalak, Lanaz, Bazian and Tawke, which according to the information can reach 265,75 barrels of oil per day, for example, the newest refineries with the capacity to filter 34,85 barrels of oil a day. Bazian, initially 100,5 and recently upgraded to 45,60 barrels, has a total capacity of <>,<> barrels and has the ability to filter <>,<> barrels of oil, but now refineries are not working with the capacity they have, for example, according to information, the cumulative refinery works at a capacity of <>,<> to <>,<> days.
 
It appears that if all the refineries are able to filter domestically, they cannot receive the oil produced from the fields, so after five days of waiting for an agreement between Erbil and Baghdad, steps have been taken to close the oil fields.
 
The daily losses of closing the oil wells from the data of 2022
 
In 2022, the total oil exported and produced in the Kurdistan Region reached more than 158 million barrels of oil, with 433,726 barrels of oil produced daily in all fields.
 
The financial losses of this oil production suspension, apart from the daily losses to the Kurdistan Region and oil companies, have led to a decline in the value of oil companies' shares in the world stock exchange, which has dropped by a different rate while stopping exports. On Wednesday 29-3-2023, the value of Norwegian DNO shares dropped from Friday at 11.56 kronor to 9.68 kronor, a 2.63 percent rate. It will also have a major impact on the value of oil fields in the future.
 
If we analyze the total level of production and oil prices this year as last year, the daily losses of this suspension are 33 million, 784,706 US dollars in the Kurdistan Region's oil industry. The KRG's daily oil revenue sits at 15 million, 643,025 US dollars, as mentioned in the first schedule.
 
Another result of the ICC's decision is not only the closure of oil fields and the suspension of production, but has also had a major impact on the plans and work of companies, which most companies are now reviewing their plans for production, development, digging new ideas, expanding oil fields and even working with their employees.
 
Another loss in the future is the work of companies in the Kurdistan Region, if Erbil and Baghdad fail to reach an agreement to enact iraq's oil and gas law, ending this story, not monthly, but now repeated daily.
 
On the other hand, there are still a number of large companies working in the Kurdistan Region, such as HKN, Taka, DINO, Hunt Oil, Rosenoff, Gazprom Naft, Christ Petroleum, Pittolium, Western Zagros, Ganal Energie, Galf K. Stone, J. Shamaran. These remain and share the ownership of oil fields, in addition to the fact that international oil service companies such as Shambarger, Weisford, Halberton, Novmet, Bitley, Oilsrev, CNPC, TGT and CNL are working awaiting the Erbil-Baghdad agreement.
 

337019340_1807469136321019_6424988798053

The total process of oil produced and sold in Kurdistan region in 2022
 
What is the ICC court's decision and the role of the UNITED STATES and Russia in bringing Erbil and Baghdad closer to reaching an agreement.
 
Another interesting point in the events following the ICC court's decision is the statement of the Turkish Ministry of Energy, which has asked for compensation, and two other Turkish sources who are aware of the case have pointed out that "the court in the Kurdistan Region As an official unit of Iraq, it has acknowledged that under the Iraq-Turkey oil pipeline contract, it has the power to deal with the Turkish side for transportation, use, access and storage of oil. and the court has violated the contract to " load " the oil from the Port of Jayhan to the customer ship
 
In return, the Iraqi oil ministry noted that "the compensation is much higher and the Kurdistan Region must implement the decision".
 
Now, the ICC court's decision is unclear, and the parties to the case publish and interpret the articles in their own interests, as Turkey has published, as well as what the Iraqi oil ministry calls on the Kurdistan Region to abide by, so this decision and its noon must be fully implemented, not the provisions Baghdad demands.
Meanwhile, ACCORDING TO INFORMATION, US COMPANIES WORKING IN THE KURDISTAN REGION'S OIL AND GAS HAVE MET WITH THE US CONGRESS AND RELATED COMMITTEES TO PLAY A ROLE IN ENCOURAGING BAGHDAD AND ERBIL TO REACH AN AGREEMENT AFTER THE DECISION.
 
For example, HKN said in a statement about the situation facing their company that it had asked US officials to "encourage all parties to make a proper decision quickly, we "We are looking at any solution that respects the terms of our contracts and gives up oil sales money in accordance with the agreements. We believe in quick decision-making and resolution in the interest of the Iraqi people in the Kurdistan Region."
 
Infact, another is related to Russian companies in the Kurdistan Region, above all Rusnaft and Gazprom Naft, which have faced problems in the past due to US sanctions, and now rusnaft alone, which owns 60 per cent of the Kurdistan Region's oil pipeline, suffers 451,756 US dollars a day.
 
The end
 
A new phase in the Kurdistan Region and a financial source, in which Baghdad is trying to comply with the terms and conditions that are in its interest, but the total decision and the afternoon, according to Turkey, are in the interest of the Kurdistan Region out of a total of five processes related to this case, the Kurdistan Region or Turkey has preceded one, which was the loading of oil.
 
The losses of these days are tens of millions of dollars, which will affect other sectors in the future, above all real estate, in addition to the huge losses to the Kurdistan Region's oil and gas industry and the work of companies in Iraq as a whole, not only in the Kurdistan Region.
 
The closure of oil fields and the reduction of production levels to the level of refineries after the warehouses are filled will harm some oil fields, in addition to stopping the production of oil-producing gas.
 
Next week, the OPEC and OPEC Press ministers' meeting will be held in Vienna on April 3, 2023. One of the topics will certainly be this issue, as it has created an instability in the markets and the price. It has raised oil by 4.2 per cent, or above $3, and cut about half a million barrels of oil daily in the markets, which is not liked by OPEC and OPEC members.
 
In fact, what should not have happened has happened, which is the closure of oil fields and its consequences, but the Kurdistan Region should use the opportunities in the ICC court's decision as these four rights" "It is not clear who is the winner, Iraq or Turkey, because both sides are demanding compensation," he said. "It is not clear who is the winner, Iraq or Turkey, because they are all in the interest of the Kurdistan Region."
 
In the end, all indications are that Baghdad and Erbil should move towards an agreement that both sides should feel the winner, not the winner and the other lost, as the problem depends on the fate of producing half a million barrels of oil.
 
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Points of agreement and disagreement revealed in oil negotiations between Baghdad and Erbil

Points of agreement and disagreement revealed in oil negotiations between Baghdad and Erbil

 

  

Baghdad - Nas  

A member of the Kurdistan Parliament for the Change Movement, Dler Abdul Khaleq, revealed on Thursday the points of agreement and disagreement in the oil negotiations between Baghdad and Erbil.  

  

  

  

Abdul Khaleq said in a statement received by NAS (March 30, 2023), that according to my follow-ups, the talks between the delegations of the Kurdistan Regional Government and the Federal Government, after the issuance of the decision of the arbitration tribunal in Paris, are as follows:  

  

1. Iraq and the Kurdistan Region export 500,400 barrels of oil through the Turkish port of Ceyhan, of which 100,<> barrels belong to the Kurdistan Region and <>,<> barrels belong to Kirkuk.  

  

2. The export of oil through Ceyhan Port shall be resumed as soon as possible, which is as necessary for the Territory as it is for the Federal Government.  

  

3. Early next week, the federal budget bill will be submitted to the House of Representatives, as it is clear that the delivery of the value of (500) thousand barrels is part of the federal budget bill for the years (2023, 2024, 2025).  

  

4 - Before the decision of the Paris Court of Arbitration, the two sides agreed on a mechanism for the joint management of oil, but after the decision the level of demands of the Federal Government increased, as follows:  


A. Oil sales must be returned to SOMO.  


Instead of the term "management", the Federal Ministry of Oil must "supervise" the process.  


Q: The federal government does not bear corporate debt, which is estimated at more than $4 billion.  


D- The position of Deputy Minister of Natural Resources / Kurdistan Regional Government will be the share of the Federal Government.  


C- Oil must be exported and the Ministry of Oil has its own mechanism for this process.  

  

In response, the KRG delegation insisted on the following points:  


1. Joint management and not supervision of the export of oil from the region.  

  

2. As stated in the State Administration Agreement, oil funds shall be deposited in a bank account under the supervision and audit of the federal government and only the Kurdistan Regional Government shall have the right to spend them.  


3. Appointment of a deputy director of SOMO from the Kurdistan Region.  


4. The oil and gas law should be enacted as soon as possible, so that the rights of the Kurdistan region to manage the energy sector are established, so that the two governments jointly manage the region's oil."  

  

"As a result of these discussions, the two sides agree on the need for re-exports, but disagree on the export mechanism and means of sale," he concluded.  

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Kurdistan delegation fails to agree with Baghdad. The suspension of oil exports may be prolonged

 
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Baghdad Today-Baghdad

An informed source revealed on Thursday that the Kurdish delegation that visited Baghdad recently failed to reach an agreement regarding the export of oil.

The source said in an interview with "Baghdad Today", that "the delegation that visited Baghdad headed by the Minister of Finance in the regional government Awat Sheikh Janab met with the Federal Minister of Oil and asked for a deadline to resume the export of oil in the region temporarily until the vote on the budget or the adoption of the oil and gas law."

"The federal government rejected the request of the regional government, insisting that the export of oil be under the exclusive supervision of SOMO," he said.

Turkey stopped exporting oil through the Turkish port of Ceyhan, following a ruling by the International Chamber of Commerce in a case filed by Iraq against Turkey years ago, related to allowing the flow of oil to the Kurdistan region abroad without Baghdad's consent.

There are fears of huge losses to the Kurdistan region in addition to Baghdad due to the suspension of oil exports from the Turkish port of Ceyhan, losses amounting to $ 35 million per day, while the suspension of exports has been going on for about 5 days.

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The national-democratic dispute "deepens more." And Surji: We have no representative in the negotiating delegation
  
{Politics: Al Furat News} The Patriotic Union of Kurdistan confirmed today, Thursday, that the dispute with the Democratic Party is "deepening."
 

The leader of the union, Ghiath Surji, told Al-Furat News that: "There is no representative for us in the delegations that the region sends to Baghdad, especially after the Paris Court's recent decision regarding stopping the export of the region's oil to Turkey."
He added, "The National Union is with this decision and that it was one of the fundamental differences between us and the Democratic Party since the region began exporting oil over many years."
Surji said, "We demanded a lot that the export be exclusively through Baghdad, and the dispute with the Democrat is getting deeper and the escalation between the two parties is also."
A delegation from the Kurdistan Regional Government arrived in Baghdad on Tuesday to discuss the resumption of oil exports and other financial issues. 
According to Kurdish sources, the delegation consists of the Minister of Finance and Economy in the Kurdistan region, Awat Janab Nuri, as well as the acting Minister of Natural Resources, Kamal Muhammad, and the head of the Cabinet Office, Omid Sabah.  
The Prime Minister for Energy Affairs and Minister of Oil, Hayan Abdul-Ghani, held a meeting with the region's delegation, which included the Minister of Natural Resources, Kamal Muhammad, the Chief of the Council of Ministers of the region, Omid Sabah, and the head of the regional government's representative in Baghdad, Faris Issa.
The new mechanisms and data for the region’s exports were also discussed after the decision issued by the Arbitral Tribunal of the International Chamber of Commerce in Paris last Thursday, March 23, 2023 in the arbitration case filed by Iraq against Turkey for its violation of the provisions of the Iraqi-Turkish pipeline agreement signed in 1973, which stipulates (The Turkish government must comply with the instructions of the Iraqi side regarding the movement of crude oil exported from Iraq to all storage and disposal centers and the final station).
The meeting was attended by the Undersecretary for Extraction Affairs, the Undersecretary for Distribution Affairs, the Director General of the Oil Marketing Company, the Director General of the Economic and Legal Department, the Director of the Government Information and Communication Office, and a number of officials in the relevant departments.

From: Raghad Dahham

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Iraqi Oil Ministry: The ball is in the Kurdistan Regional Government's court

08:48 - 29/03/2023

It has been read 8121 times
 
 

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The Iraqi government is in talks with the Kurdistan Regional Government (KRG) to resolve the issue of oil production and exports, a spokesman for the Iraqi Oil Ministry said. . . . .

"The decision of the International Court of Justice is clear and everyone must comply with it. The Iraqi Oil Company must export oil and this is a priority. Turkey and the Kurdistan Region must comply with it," Oil Ministry spokesman Assem Jihad told VOA.

The Iraqi government and the Oil Ministry are preparing to export oil from the Kurdistan Region according to the new measures

"The Iraqi government and the Oil Ministry are preparing to export oil from the Kurdistan Region according to the new measures. Now the ball is in the Kurdistan Region's court to approve the measures taken by the Iraqi Oil Company The KRG's approval has been suspended until the Oil Ministry exports the oil.”

Delegations from the Kurdistan Region continue to exchange views on the oil and gas bill

"The delegation will come from the Kurdistan Region and continue to exchange views on the oil and gas bill. We will also discuss the outstanding issues between the Kurdistan Region and Baghdad," Jihad said We hope that the issues will be resolved through dialogue.”

The Iraqi Oil Ministry has taken several companies to court over their operations in the Kurdistan Region without consent

"One of the issues that is expected to be discussed between the Kurdistan Region and Baghdad is the issue of oil companies that extract and export oil from the Kurdistan Region without the consent of Iraq," he said The Iraqi Oil Ministry has sued several companies in the past.

We are still consulting with our brothers in the region to get out of this crisis with the least damage

"We are still consulting with our brothers in the Kurdistan Region to find a mechanism to deal with what happened in the past and related to the oil of the region, we want the mechanism to serve the region," he said We hope to resolve the issues through dialogue.”

Following the decision of the Paris Arbitration Court to suspend the export of oil from the Kurdistan Region through Turkey, the court today ruled that the Kurdistan Regional Government has the right to store and use the oil pipeline to the world port.

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From 5 points... Details of an agreement between Baghdad and Erbil on the region's oil revealed
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Economy News / Baghdad

Economist Nabil al-Marsoumi revealed on Saturday that the central government had reached an agreement with Erbil that includes five points.

"The Iraqi government and the Kurdistan Regional Government have reached a preliminary agreement on oil sales after the decision of the international tribunal," al-Marsoomi said in a Facebook post.

The agreement includes "Kurdistan's oil sales through SOMO and the formation of a joint committee between the regional government and the federal government to monitor the export of oil from Kurdistan."

As well as "putting oil revenues in the Kurdistan Region in a bank account, as stated in the draft budget for 2023, and the Kurdistan Regional Government must gradually cancel all contracts with oil companies."

"The position of deputy director of SOMO will be assigned to the Kurds and oil exports from Kurdistan will resume within two days," he said.

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Foreign report: Kurdistan government faces setback after stopping the flow of oil from the territory of the region

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Economy News-Baghdad

The Kurdistan Regional Government (KRG) is facing a major setback in the oil industry after the ruling by the International Court came in favor of the central government in Baghdad to suspend crude oil exports via pipelines from the Kurdistan Region of Iraq.

The conflict between the central government in Baghdad and the Kurdistan Regional Government of Iraq dates back to 2014, when the Kurdistan Regional Government began exporting oil directly through production agreements with several international oil companies, a move that sparked a long-running dispute that led to the central government periodically withholding the region's share of the state budget.

The Iraqi government has filed a lawsuit against Turkey, arguing that the only legal right to export oil via pipeline to the Turkish city of Ceyhan belongs to the central government in Baghdad alone, not the KRG. The outcome of the International Court of Arbitration's decision to immediately halt pipeline imports by Turkey dealt a strong financial and political blow to the KRG, which owed $3.35 billion to oil buyers as of December 31.

Bilal Wahab, a fellow from the Washington Institute for Middle East Policy's Wagner Program, said in an interview with the same website that "this loss represents a major blow to the oil and gas industry in the Kurdistan Region of Iraq, it is true that it came after a series of previous losses, but this particular loss is different as it may be significantly decisive."

In February 2022, the Iraqi Federal Court issued a ruling requiring the KRG to hand over all crude oil produced in the region and its vicinity to the Ministry of Oil in Baghdad, and to cancel KRG's oil contracts, including agreements related to exploration, extraction, exports and other sales.

Despite requests for comment, the KRG has remained silent on the matter, claiming it is unconstitutional, following its historical approach of ignoring provisions harmful to its interests issued by the central government.

"This international ruling is a reinforcement of Baghdad's position, which significantly weakens the position of the Kurdistan Regional Government. Now, the regional government is counting on Baghdad's goodwill to continue its main industry."

In the last three months of 2021, KRG oil production reached about 437,90 barrels per day, accounting for only about one-tenth of Iraq's total oil production. In addition, nearly <>% of Kurdish crude oil was exported via pipelines, according to a Deloitte report prepared for the KRG.

Bilal estimates that the region's storage capacity can only hold up to five days of production. Unless Erbil and Baghdad reach an agreement to resume pipeline-based exports, production is likely to decline or stop altogether by Wednesday.

"This ruling marks the end of the oil and gas industry as we know it today in the KRG, so the question is what will you go to as an alternative?"

The KRG used to sell its oil at a significant discount compared to global market prices, with an average price in December of $62.95 per barrel, compared to the average Brent crude of $80.92. This disparity is partly due to the political risks involved in trading with the KRG.

Bilal adds that if the KRG reaches an agreement with Baghdad, it can charge a few more dollars per barrel, making its price equivalent to market prices. However, this will require the KRG to give up some of its political independence, which could have serious consequences."

Douglas Silliman, president of the Arab Gulf States Institute in Washington and former U.S. ambassador to Iraq from 2016 to 2019, said in an interview that "the Kurds have been granted more economic autonomy than many in Baghdad were willing to accept, including the ability to sign production-sharing agreements with international oil companies and other producers."

Over the past fifteen years, most economic activity in Kurdistan has been based on legal conditions that Baghdad did not accept, but in Erbil and Sulaymaniyah. Therefore, the Federal Court ruling poses a significant threat to foreign investment in Kurdistan beyond just the oil and gas sector."

The ongoing oil dispute is taking a heavy toll on the KRG, affecting its credibility and undermining foreign investment in the region. Fernando Ferreira, director of geopolitical risk at US-based Rapidan Energy Group, says that "the KRG is already months behind oil payments to international oil companies, a factor that weakens investor confidence in the region and affects the companies' willingness to invest, because they don't trust that they will be paid on time."

Complicating matters further, recent pressure from Baghdad forced three U.S. oilfield service companies — Schlumberger, Baker Hughes and Halliburton — to withdraw from Kurdistan, all three of which declined to comment.

In another blow to the KRG, in March oil company Trafigura terminated its contracts with the KRG, an AGBI spokesperson said.

"Although the KRG's oil contracts have been annulled by the Federal Court, a compromise between Erbil and Baghdad is possible in the long term. By making the agreement between the parties allow the old laws to continue to apply to some current situations while the new law applies to all future cases, this means that any existing oil contracts signed by the KRG with international oil companies will be allowed to continue despite being invalidated by the Federal Court ruling, while any new contracts must comply with the new law."

Bilal suggested that "stopping the federal court's decision could be an option, but the best solution is for Iraq to enact a national hydrocarbon law. This law has been pending since the drafting of the Iraqi constitution in 2005, and the oil and gas industry was mostly governed according to the laws established in the previous regime. There should also be, in one way or another, a legal provision that legitimizes oil and gas contracts signed by the KRG, and that article makes the KRG alone, not Baghdad, responsible for the money owed."

Bilal stressed that "the KRG must admit its defeat and move forward," acknowledging that "the region's approach to oil as a geopolitical asset rather than an economic one was a mistake."

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