SULAIMANI, Kurdistan Region — The Association of the Petroleum Industry of Kurdistan (APIKUR) has called for the immediate resumption of oil exports from the Kurdistan Region through the Iraq-Turkey Pipeline (ITP). The appeal follows recent statements by Iraqi Prime Minister Mohammed Shia al-Sudani, who indicated that the pipeline might reopen by the end of 2024.
In a statement, APIKUR has said it advocates for tripartite negotiations between the Iraqi Federal Government, the Kurdistan Regional Government (KRG), and international oil companies (IOCs) to resolve long-standing disputes and kick-start exports. The organization emphasized that its members are ready to resume oil shipments under secure payment conditions and existing commercial agreements.
“APIKUR member companies are prepared to resume exports provided there are guarantees for payment on past and future shipments, as well as the preservation of commercial agreements,” the organization stated.
APIKUR expressed optimism about al-Sudani’s remarks during an interview on Bloomberg’s Horizons Middle East and North Africa program on September 17, 2024. The organization signaled its readiness for immediate talks to secure mutually beneficial solutions for reopening the ITP, which was transporting around 450,000 barrels of oil per day to global markets before the suspension in March 2023.
The halt in exports has been largely attributed to disagreements between Baghdad and IOCs over oil production costs. APIKUR has indicated its willingness to negotiate modifications to existing contracts to facilitate a resolution between the federal and regional governments.
Moreover, the association voiced support for the KRG’s recent stance regarding the export of oil through the Iraqi State Organization for Marketing of Oil (SOMO). APIKUR stressed that direct sales agreements between IOCs and SOMO could be the most effective approach to resolving the impasse, with suggestions for upfront payment arrangements, escrow mechanisms, or in-kind payments at Ceyhan Port.
The economic implications of restarting oil exports are substantial, with APIKUR estimating that Iraq and its stakeholders could recover approximately one billion dollars per month in revenue. The association noted that $20 billion has already been lost since exports were halted in March 2023.
In addition, APIKUR highlighted that Kurdistan’s oil production could play a pivotal role in helping the Iraqi Ministry of Oil achieve its target of increasing national output to 6 million barrels per day by the end of 2027, boosting export capacity from the Kurdistan Region.
Oil exports via the ITP were suspended following a ruling by the International Court of Arbitration in Paris, which found Turkey in breach of a 1973 treaty by permitting exports without Baghdad’s approval. This decision has significantly impacted the Region’s primary income source, resulting in billions of dollars in losses.
