Economy

Oil companies in Kurdistan call for resumption of oil exports

“Should the pipeline outage continue, foreign investment will be further reduced, which in turn will put at risk further jobs and the ability for the industry to deliver the 400,000 barrels of oil per day required under the 2023-2025 Federal Budget Law.”

Wladimir van Wilgenburg 2023/07/26 21:37

The Association of the Petroleum Industry of Kurdistan (APIKUR) on Tuesday called for the resumption of oil exports (Photo: APIKUR)

Kurdistan APIKUR Erbil Oil and Gas Oil Exports Paris International Court of Arbitration

ERBIL (Kurdistan 24) – The Association of the Petroleum Industry of Kurdistan (APIKUR) on Tuesday called for a speedy reopening of the Iraq-Turkey pipeline for oil exports four months after the closure of the pipeline in March.

“To date, APIKUR member companies, which include DNO, Genel Energy, Gulf Keystone Petroleum, HKN Energy and ShaMaran Petroleum, have reduced spending plans in the region by some $400 million in 2023, with 2024 spending plans under review,” the Association said.

“With no certainty on when the ITP will reopen, or when payments for exports will then resume, our Member companies have already had to take steps to cut costs, which have resulted in hundreds of personnel layoffs,” the Association said.

APIKUR was founded in 2023 by international upstream oil and gas companies active in the Kurdistan Region of Iraq with the goal of promoting the Region as an attractive destination for international oil and gas companies, service providers and investors.

APIKUR’s member companies directly employ over 1,700 local staff, including many graduates and professionals.

Since March 25, Kurdish oil exports through Turkey's Ceyhan port have been halted at Baghdad's request. Iraq claimed victory in a case against Ankara at the International Court of Arbitration in France, leading to the suspension of exports through the Iraq-Turkey pipeline by Turkey.

So far, talks between Kurdish, Iraqi and Turkish officials have failed to find a resolution to oil exports. Turkish President Recep Tayyip Erdogan is expected to visit Baghdad this coming week to discuss the possible resumption of oil exports.

Officials from Turkey, Iraq, and the Kurdistan Region have been engaged in negotiations to restore the oil flow. The Kurdish region's economy heavily relies on this export for its economic functioning. However, despite intensive talks, the efforts have not yet resulted in a resumption of the oil flow.

“The oil industry in Kurdistan generated over 80% of the revenue for the Kurdistan Region’s economy in 2022. Should the pipeline outage continue, foreign investment will be further reduced, which in turn will put at risk further jobs and the ability for the industry to deliver the 400,000 barrels of oil per day required under the 2023-2025 Federal Budget Law,” the Association warned.

The Kurdistan Region has lost more than $3 billion as a result of the stoppage, Safeen Dizayee, the head of the Kurdistan Regional Government (KRG) Department of Foreign Relations, told Kurdistan 24 last week.

Moreover, the Kurdistan Region has handed over about 50,000-60,000 barrels of oil on a daily basis to Baghdad since mid-June.

APIKUR underlined that “a speedy reopening of the ITP for oil exports and a clear repayment and cost recovery plan that is consistent with existing contracts are necessary for the resumption of oil production and in the best interest of Iraq as a whole and the Kurdistan region, as well as our Member companies.”