Oil minister says talks in Kurdistan will discuss production costs as pipeline deal with Turkey is sealed, 12 NOV
Oil minister says talks in Kurdistan will discuss production costs as pipeline deal with Turkey is sealed
Shafaq News/ Iraq has agreed with Turkey to resume oil shipments via Ceyhan port, and talks are underway to address production cost issues, Federal Oil Minister Hayyan Abdul-Ghani told reporters in Erbil in a joint press conference with Kamal Mohammad Saleh, the Kurdistan region's minister of natural resources, on Sunday.
Accompanied by a high-level government delegation, Abdul-Ghani arrived in the region this morning for a three-day visit for talks with Kurdish officials on the years-long dispute over who should control the region's oil.
"The visit aims to converge views on oil production and exportation from the Kurdistan region," he said. "in our meetings with the Ministry of Natural Resources, we will discuss all the necessary measures to facilitate them."
"We are committed to resuming oil shipments from the region and will spare no effort to address the production costs with the international companies operating there," he continued.
The minister assured that Iraq and Turkey have reached an agreement to put the oil pipeline that delivers Iraqi oil to the Ceyhan port back into service.
Turkey halted flows through Iraq's northern oil export route after an arbitration ruling in March by the International Chamber of Commerce (ICC) ordered Ankara to pay Baghdad damages for unauthorized exports between 2014 and 2018.
Turkey says the pipeline is prepared for shipments to begin, but the Iraqi side insists it has not received official notification from Turkey on whether the pipeline is ready.
For his part, the region's minister of natural resources said that the meetings in Erbil will also discuss transportation costs.
"The federal budget has set the production costs at six dollars a barrel. However, this rate is incompatible with the contracts we signed with oil operators in the region. We hope we will be able to address this issue during this visit," he said.
Late in October, Iraq's Prime Minister Mohammed Shia al-Sudani said that foreign oil companies operating in the Kurdish region informed his government that if an agreement is reached on oil production costs and contracts, they will resume oil production within a month.
"Foreign companies operating in the Kurdistan region believe that the production costs determined by the Iraqi side are low and not commensurate with the production costs from the region’s fields," he said.
Turkey's closure of the Iraq-Turkey pipeline in March has collectively cost Iraq, Kurdistan's Regional Government (KRG), and oil producers a total of $7 billion in lost export revenues, the Association of the Petroleum Industry of Kurdistan (APIKUR) has previously said.
On Thursday, APIKUR announced they will not produce oil for pipeline exports until the issue of overdue payments estimated at nearly $1 billion is resolved.
The accumulated KRG debt to DNO, one of the operating companies, stood in excess of $300 million for oil sales between 2023 and 2024, according to the company itself.
Other APIKUR members are Genel Energy, Gulf Keystone Petroleum, Shamaran Petroleum, HKN Energy Ltd, and Hunt Oil. Collectively, they produce about 50% of the oil in Kurdistan.
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