Resumption of oil exports by KRG

1 August 2012

Erbil, Kurdistan Region – Iraq (KRG.org) – Oil exports from the Kurdistan Region will resume in the first week of August, the Ministry of Natural Resources (MNR) announced today, adding that the decision was a confidence-building measure aimed at solving once and for all the ongoing oil and gas issues in Iraq.

The MNR said that despite initial reluctance from the producing international oil companies (IOCs) in the Region to export without guarantees of payment, the IOCs had been persuaded to restart exporting at 100,000 barrels per day.

A spokesman for the MNR said, “This is a goodwill initiative and we sincerely hope that the federal authorities in Iraq respond positively, making all the outstanding payments due to the IOCs and implementing all the measures agreed upon between the KRG and the federal government.”

The spokesman said exports would remain at 100,000 bpd for a month and if payments were forthcoming, they could move swiftly up to 200,000 bpd.

The Kurdistan Regional Government Minister of Natural Resources, Dr Ashti Hawrami, said, “After approaches made by friends of Iraq in political and diplomatic circles, the KRG has decided to resume exports from the Region to build confidence with the federal government with the purpose of squaring up all the oil and gas issues in Iraq.”

Dr Hawrami said these issues included: settling outstanding export payments and committing to regular payments for future exports; restoring the supply of refined products to the Kurdistan Region; payment of the KRG petrodollar (a sum allocated federally to the producing governorates per barrel of oil produced by them); and the settlement of outstanding fuel import costs for power generation in the Region.

Dr Hawrami also expressed hope that the authorities in Baghdad would recognise and implement, “in both letter and spirit”, the issues negotiated between the KRG delegation, headed by the then Prime Minister Dr Barham Salih, and various federal government ministers during a visit to Baghdad in October 2011, and as presented to Prime Minister Dr Nuri Al-Maliki in a follow-up letter.

Dr Hawrami said such positive steps could help ease the way towards the much delayed federal hydrocarbon and revenue sharing laws, which should be within the framework of Iraq’s federal and decentralised constitution.

“It is time to put aside futile and time-wasting attempts to re-impose an illegal centralised control over oil and gas in Iraq. The country is crying out for cooperation and coordination on these issues, not confrontation,” Dr Hawrami said.

For further details, see the attached letter to Prime Minister Maliki from the then KRG Prime Minister Salih, following the KRG delegation’s visit to Baghdad in October 2011

The MNR has also published the correspondence between Dr Hawrami and the IOCs regarding the imminent temporary resumption of oil exports from the Region: