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.

https://shafaq.com/en/Kurdistan/Oil-minister-says-talks-in-Kurdistan-will-discuss-production-costs-as-pipeline-deal-with-Turkey-is-sealed

Iraq signs agreement with ExxonMobil for exit from West Qurna 1 field, PetroChina to take over, 12 NOV

Iraq signs agreement with ExxonMobil for exit from West Qurna 1 field, PetroChina to take over

Shafaq News/ The Iraqi Ministry of Oil confirmed on Saturday the finalization of a settlement agreement with ExxonMobil, paving the way for the American energy giant's departure from the West Qurna 1 oil field. Simultaneously, the ministry announced that Chinese company PetroChina would assume the field's leading operator role.

Hassan Muhammad, deputy Basra Oil Co. manager in charge of oilfields and licensing rounds affairs, revealed that the settlement agreement underwent scrutiny by the Ministry of Oil and the Basra Oil Company. It was determined that PetroChina would become the primary operator of the West Qurna 1 field. As a result, the Chinese company will now hold the largest share in the field after ExxonMobil's departure.

ExxonMobil, which previously owned a 22.7% stake in the West Qurna 1 oil field with a capacity of 550,000 barrels per day, has now concluded a "sale agreement" to transfer its share to the state-run Basra Oil Company. 

The sale agreement encompasses financial matters, and a commitment has been made to address the tax issue associated with ExxonMobil's share in additional negotiations.

Regarding the unresolved tax matter, the Iraqi official stated that two options are under consideration: reaching a settlement agreement on the tax or resorting to arbitration.

Notably, the preceding year, the state-owned oil and gas firm Pertamina acquired 10% of ExxonMobil's share in the West Qurna 1 oil field, increasing its stake to 20%. Concurrently, the Basra Oil Company purchased 22.7% of the field's share.

According to officials from the Basra Oil Company, with ExxonMobil's exit from West Qurna 1, the company will no longer have a presence in the Iraqi energy sector.

https://shafaq.com/en/Economy/Iraq-signs-agreement-with-ExxonMobil-for-exit-from-West-Qurna-1-field-PetroChina-to-take-over

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  Article:  "Intensive Iraqi-American meetings in the Emirates result in important decisions regarding external transfers of the dollar”  

Quote: "The official Iraqi News Agency quoted a government source as saying that intensive meetings took place during the past few days in Abu Dhabi between a delegation from the Central Bank of Iraq and the American side responsible for foreign transfer operations to cover imports, indicating that the negotiations culminated in a number of decisions and mechanisms that contribute to facilitating procedures. Regarding external transfers related to imports through the foreign currency sales window."

Article: " Central Bank: Inflation rates in Iraq are low and their percentage is acceptable compared to countries in the region"

Article:  "Economist: It is not possible to mint an Iraqi coin currently, and inflation is a thousand times high ”

Article:  "Misdemeanor Integrity Court: Iraq has come a long way to get off the money laundering blacklist"

Iraq signs $257m loan deal with JPM, GE to upgrade power plants, 12 nov

Iraq signs $257m loan deal with JPM, GE to upgrade power plants

Shafaq News/ Iraq's Finance Minister, Dr. Taif Sami, signed a $257 million loan agreement with JP Morgan Chase and General Electric (GE) on Sunday to upgrade the country's power plants.

The loan will be used to fund the fifth phase of the annual maintenance program (PUP5/B), which will cover 11 power plants across Iraq. 

The program, according to Iraqi officials, is expected to improve the efficiency of the plants and increase electricity production.

The electricity infrastructure in Iraq has suffered from inadequate maintenance since the 1980s.

Power outages are part of daily life in Iraq, but older generations can vividly recall a bygone era before the 1980s, when Iraq boasted one of the most developed energy sectors in the region. 

The loan is guaranteed by the U.S. Export-Import Bank (EXIM).

The agreement is the latest in a series of loan deals that Iraq has signed with international lenders, including Siemens and TotalEnergies, over the past few months in a bid to raise funds to finance infrastructure projects and other economic development initiatives.

Following the eight-year-long war with Iran, the decline in oil revenue reduced the Iraqi government's spending on public services. The 1990 Gulf War, coupled with the sanctions that followed, devastated state infrastructure, particularly the electric grid and water networks. By the end of the 1990s, most Iraqis did not have consistent access to electricity or water

"This loan will help to close the gap between supply and demand for electricity in Iraq," Sami said at the signing ceremony. "It will also help to improve the quality of life for Iraqis." 

Despite Iraq's natural wealth, decades of conflict and corruption have limited the country's infrastructure, prompting over-reliance on Iran for energy provisions. While previous Iraqi governments have struggled to attract foreign investments, Iraq's complex political system has proven resistant to crises, and the nation's current state of relative peace has catalyzed a shift.

Recently, the sector has focused on new gas-capture and power-generation efforts—including projects in the just-signed $27 billion deal with France’s TotalEnergies, which the Biden administration welcomed.

https://shafaq.com/en/Economy/Iraq-signs-257m-loan-deal-with-JPM-GE-to-upgrade-power-plants

Experts expects a breakthrough as Baghdad-Erbil oil talks progress, 12 nov

Experts expects a breakthrough as Baghdad-Erbil oil talks progress

Shafaq News/ Experts are optimistic about the prospects for an agreement between Baghdad and Erbil on the oil file for the Kurdistan Region.

Speaking to Shafaq News Agency, Kurdish oil expert Gorfed Sherwani said that the visit of the Federal Minister of Oil to Erbil on Sunday reflects the seriousness of the Iraqi government.

"The visit shows that the two sides are ready to discuss the tactical, administrative, and financial aspects of resuming oil exports from the region," Sherwani said.

He added that the main disagreement between the two sides is over the vision for the oil law. The Kurdish government wants to maintain its autonomy, while the federal government wants more control.

"The Constitution guarantees a clear role for the federal government, the regions, and the oil-producing provinces," Sherwani said. "We hope that this will be taken into account in the distribution of responsibilities for managing the oil file."

Sherwani also said that the estimates for the cost of oil production in the region vary. The federal government estimates that it costs $12 per barrel to produce oil and $7 per barrel to transport it. The Kurdistan Regional Government estimates that it costs $24 per barrel to produce oil and $8 per barrel to transport it.

"These figures are realistic and are in line with what is paid to foreign companies that sign a contract with the Federal Ministry of Oil," Sherwani said.

https://shafaq.com/en/Economy/Experts-expects-a-breakthrough-as-Baghdad-Erbil-oil-talks-progress

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