KRG oil report reveals impact of export suspension on production, revenue
ERBIL (Kurdistan 24) - A year has passed since the suspension of oil exports from the Kurdistan Region of Iraq (KRG). The future of the issue remains uncertain, but the Ministry of Natural Resources has released a report on the amount of oil delivered to Baghdad, domestic oil sales, and revenues.
Kurdistan24 has received a written report prepared by the Ministry of Natural Resources, which presents the volume of oil produced, sales methods, and revenue.
According to the report, before the suspension of oil exports on March 25 last year, production continued in 14 oil fields in the Kurdistan Region. However, after the decision, production in five fields has been suspended, with only nine fields continuing in a limited capacity.
Oil between the Kurdistan Region and Iraq
The report states that since April 1, 2023, the nine oil fields have produced 45 million barrels of oil, of which 11.8 million barrels have been delivered to the Iraqi Oil Ministry.
The process of handing over Kurdistan Regional Government (KRG) oil to the Iraqi Oil Ministry began on June 25, 2023, and continued until early December last year. However, according to Awat Sheikh Janab, Minister of Finance and Economy of the Kurdistan Region, no remittances or payments have been sent to the Kurdistan Region as an expense for the production or transportation of the oil.
Iraq's negligence in paying the cost of oil production and transportation has led the Kurdistan Regional Government (KRG) to suspend oil deliveries to the Iraqi Oil Ministry since early December.
When considering the amount of oil handed over to the Iraqi Oil Ministry, the total volume of oil production in the Kurdistan Region indicates that only 33 million 900 thousand barrels of oil remain for the Kurdistan Region.
This amount of oil will be divided into two parts: one part, constituting 45%, will be allocated to companies, approximately 15 million 250 thousand barrels, while the remaining part, approximately 18 million 650 thousand barrels, will be retained by the Kurdistan Regional Government.
Sales and Refinement of Oil in the Kurdistan Region
After the suspension of oil exports from the Kurdistan Region, domestic production of fuel products increased. In this context, the Ministry of Natural Resources increased the level of domestic gasoline production through both the Kar and Lanaz refineries, resulting in a significant reduction in gasoline prices.
According to the report of the Ministry of Natural Resources of the Kurdistan Region of Iraq, more than a million barrels of oil produced were given to the two refineries, which produced gasoline and made it available on the market at a reasonable price. Consequently, the price of regular gasoline dropped to less than 780 dinars.
As a result, 17.65 million barrels of oil remained to be sold by the Kurdistan Regional Government, which was sold at an average price of $31.3 per barrel, bringing the total revenue to $552.445 million.
The average monthly revenue from oil sales last year was less than $50 million, of which the cost of electricity production was paid to Dana Gas, amounting to between $22 million and $24 million per month. They were all supplied with oil last winter.