KRG Ministry of Natural Resources

3 June 2009 

Erbil, Kurdistan – Iraq (KRG.org) – Iraqi President Jalal Talabani, Kurdistan Region President Masoud Barzani, and Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani joined in celebrating the start of crude oil exports from the Kurdistan Region. 

The export of crude oil from the Tawke and Taq Taq fields represents a landmark accomplishment for the Kurdistan Region that will bring in much needed revenues for the people of Iraq. 

President Talabani underscored the importance of this day and the necessity of cooperation between Kurds and Arabs. “We must stress tolerance between Arabs and Kurds – we have had a sense of brotherhood and this will remain.” He added, “This is an historic event, not only for the Kurdish people but for all Iraqis.” 

President Barzani said, “We have proven in a clear, proper way that we are committed to the Constitution of Iraq. I congratulate everyone on this achievement, which will benefit all Iraqis.” He added, “I wish much success for all the people of Iraq and of the Kurdistan Region; that we may live in prosperity and peace.” 

Prime Minister Nechirvan Barzani presented an overview of the KRG’s position on oil exports. “We are happy to be part of a federal Iraq within a democratic constitutional framework. When we open these valves today, the Kurdistan Region will be earning hundreds of millions of dollars in revenue for all the people of this country.” 

The Prime Minister added, “We are determined to use our natural resources in a constructive manner for the benefit of all Iraqi citizens, and to create a better future for ourselves and our neighbours, as well as for future generations. It is important to judge people not by what they say, but by what they do. Five years ago we promised to share our energy resources with Iraq. Today our actions and deeds speak for our words and promises.” 

The Speaker of the Kurdistan Parliament Adnan Mufti emphasised the positive impact of this step, and expressed his hope for a bright future and enhanced development throughout Iraq. “It is in the interests of the people of the Kurdistan Region and of Iraq that we build a reputation as the oil industry partner of first choice with private and international oil companies. The Oil and Gas Law passed unanimously by the Kurdistan parliament in August 2007 provides a solid legal framework in which the oil industry can flourish,” he said. The Speaker added, “The passage of Kurdistan’s oil and gas law through parliament was not easy. But in some ways it marked a coming of age for our chamber.” 

Dr Ashti Hawrami, the KRG Minister for Natural Resources detailed the value and importance of the KRG’s contribution to Iraq’s oil exports. More than 35 companies from 15 different countries, including Turkey, have entered into contracts. At today’s oil price, the KRG’s efforts will generate 2 billion US dollars in revenue within one year, 5 billion dollars within another year, and a staggering 20 billion dollars in just four years. He added that the contractors have strong incentives to invest quickly, leading to much earlier revenue returns to the people of Iraq. The investors get a gross profit share of around 10 to 12 percent. 

Dr Hawrami spoke passionately about the value of market-driven policies in the rest of the Iraq, the cost to the Iraqi people of current and past failures to manage oil resources well, and how decentralization and competition can increase oil revenues for Iraq. The Constitution, he noted, requires the oil resources to be managed in a way that maximizes revenues for all of the people of Iraq. He warned the Parliament in Baghdad that its own independent experts were advising that the contract models in the bid rounds may not satisfy the Constitution’s requirements. 

Minister Hawrami emphasised the need for a modern federal oil law and the vital importance of a clear, transparent and objective revenue sharing law to share the oil revenues. He hoped that this day marked the beginning of a new era of cooperation within Iraq and across borders. 

Iraqi Vice President Hashemi, Vice President Mahdi, and Deputy Prime Minister Al-Isawi sent their representatives to attend the event, and several members of Iraqi Parliament were present, including many sitting on the Oil and Gas Committee. 

The CEOs of the three principal oil firms involved in these fields – Addax, DNO, and Genel Energy – all expressed their happiness regarding the commencement of crude export as well as the development of the Kurdistan Region over the last several years. 

Technicians opened the valves from the two oil fields via live television feed, while President Talabani and Barzani came onstage together to thunderous applause. The oil will join the main Iraqi pipeline, which runs to Ceyhan in Turkey where it is then exported internationally.