Iraq, Kurdish authorities yet to agree oil exports to Turkey

Iraq, Kurdish authorities yet to agree oil exports to Turkey
An ongoing dispute between the Iraqi federal government and KRG over oil has led to political deadlock, with some energy and political experts offering a way out.
3 min read
28 November, 2023
The Iraqi-Kurdish oil dispute has led to a political impasse [Getty]

Key obstacles remain in the resumption of oil exports from the Kurdistan region of Iraq to Turkey, Iraqi officials and Kurdish experts have told The New Arab, including renegotiating contract terms with international oil companies that operate in the autonomous territory. 

Earlier this month, Iraq's Oil Minister Hayan Abdel-Ghani said that Baghdad could reach an agreement with the Kurdistan Regional Government (KRG) and international companies within three days to resume production and export of oil to Turkey.

Three weeks later, a breakthrough on the issue remains elusive, despite the cash-strapped KRG urgently needing funds to pay teachers and public sector officials.

"The issue is still being discussed and negotiated," Asim Jihad, the spokesperson of Iraq’s Oil Ministry on Monday told The New Arab

Karwan Hama Saleh, deputy-chairman of the Mesopotamia Foundation for Strategic Studies (MASS), recently explained that the delay in resolving the crisis was in part due to international companies not being ready to alter service contract terms with the Iraqi federal government. 

"Currently, the main obstacle is the contracts that the KRG has signed with oil companies which are Production Sharing Contracts (PSCs) while Iraq has service contracts with the companies, therefore Iraq does not want to shoulder the responsibility of those PSCs," he told The New Arab.

MASS recently held a conference to attempt to resolve the issue between the Iraqi government and the Kurdish authorities.

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Hama Salih, an expert on economics and leadership who spoke at the conference, said that in order for Baghdad and Erbil to find a middle ground, the Iraqi government should open the gates to all oil and gas companies to invest across the country.

If a solution to the oil production issue is not found soon, then more problems will set in, Salih warned, particularly due to concurrent regional crises.  

"Because of Israel's war on Gaza, Europe's need for energy has increased. Although the Kurdistan region's oil has no great impact on the world’s energy map, Europe is ambitious [about] the region's oil," Salih said. 

"Therefore, we hope the Kurdistan region exploits these opportunities with an open mind and out of personal interests."  

Other panelists have also stressed that the oil and gas issue, if handled correctly, could bring Baghdad and Erbil closer together, not further apart.   

Iraqi Kurdistan began exporting oil independently to Turkey without the federal government's consent in 2014, sparking reprisals from Baghdad.

Since 25 March, Ankara had ceased importing 450,000 barrels from the Kurdistan region, after an international tribunal found that Baghdad was correct to insist on overseeing all exports of Iraqi oil.

The tribunal, run by the International Chamber of Commerce (ICC), ordered Turkey to pay Baghdad damages of $1.5 billion for allowing the KRG to export oil between 2014 and 2018 without the Iraqi government's consent.