KRG reduces oil production by half

ERBIL (Kurdistan24) – The Kurdistan Regional Government (KRG) has halved its oil production, bringing output down to 140,000 barrels per day (bpd) as of September 2, 2024, in line with Iraq’s commitment to the Organization of the Petroleum Exporting Countries (OPEC), according to Acting Minister of Natural Resources Kamal Mohammed.

Speaking in Istanbul, Kamal Mohammed stated that this reduction marks a 50 percent decrease in the Kurdistan Region’s oil production.

The cut is part of Iraq’s broader strategy to meet OPEC’s production limits, a point of ongoing contention between the federal government and the Kurdistan Region.

On August 23, 2024, Sabah Subhi, a member of the Oil and Gas Committee in the Iraqi Parliament, told Kurdistan24 that a proposal had been made to the Iraqi Oil Ministry to extract 400,000 barrels of oil daily from the Kurdistan Region.

The plan included building a pipeline from the Kurdistan Region to Kirkuk and then to Basra. However, the idea was scrapped due to logistical challenges.

Subhi also criticized the Iraqi Oil Ministry, accusing it of blocking all attempts to export oil from the Kurdistan Region, despite Iraq exceeding its OPEC quota by 1.4 million barrels out of the 3.6 million barrels allocated to it.

OPEC has issued multiple warnings to Iraq about surpassing its production limits.

Read More: Iraq blocks Kurdistan Region oil exports to stay within OPEC quota, MP claims

The Kurdistan Region suspended its oil exports through the Turkish Ceyhan port on March 25, 2023, following a legal dispute between Baghdad, Erbil, and Ankara. Talks to resume exports have stalled, causing financial strain on both Iraq and the Kurdistan Region.

The halt in exports has also removed about half a million barrels of oil per day from the global energy market.

International oil companies operating in the Kurdistan Region have accused the Iraqi government of obstructing efforts to resume exports. Col. Myles Caggins, a spokesperson for the Kurdistan Oil Industry Association, told Kurdistan24 that one of the key issues is the disagreement between the KRG and Baghdad over international oil contracts and the cost of production.

Read More: Association of Oil Companies  Calls for Resumption of Kurdish Oil Exports

In May 2024, the Iraqi Oil Ministry invited the KRG’s Ministry of Natural Resources and associated companies for talks in Baghdad to discuss the future of oil exports from the Kurdistan Region. The ministry emphasized that oil exports should align with the budget law.

The KRG responded by affirming its commitment to resolving the issue, stating that it had been engaged in discussions with Baghdad since the beginning. The Ministry of Natural Resources revealed that it had met with officials from Iraq’s oil, planning, and finance ministries in December 2023 to sign agreements aimed at resolving the dispute.

Further meetings between the two sides took place on May 19 and 20, 2024, and the KRG expressed readiness to visit Baghdad again to continue negotiations. Both sides remain in talks as they seek a resolution to resume oil exports and stabilize the region’s economy.