A source in the Iraqi North Oil Company said that a tripartite agreement has been signed between the Kurdistan Regional Government (KRG) Ministry of Natural Resources, the Iraqi Ministry of Oil, and oil companies on oil exports, which have been halted for nearly two years and six months.

The source in the Iraqi North Oil Company told Channel8 that they are waiting for an official letter to resume oil exports.

“If we receive a letter, we will export oil again in less than an hour,” the source added.

KRG Confirmed Agreement Signing Today

Earlier, KRG spokesman Peshawa Hawramani confirmed to Channel8 that today a tripartite agreement to restart oil exports from the Kurdistan Region will be signed with the Iraqi government and oil companies.

Turkey Not Yet Notified

Meanwhile, a source in the Turkish Ministry of Energy and Natural Resources told a Channel8 correspondent in Ankara that Iraq has not informed the ministry about the resumption process, adding that Turkey has been warned several times over the past two years to take measures for the exports.

KRG-Iraq Agreement

An agreement was reached between the KRG and the federal government in July that would see oil exports resumed when Baghdad remits salaries. The KRG would also pay the federal treasury’s share of revenues to Baghdad on a monthly basis.

On September 16, Channel8 released information on the oil issue and the agreement between Erbil and Baghdad, and two senior KRG officials confirmed it. The Iraqi government, particularly the Oil Ministry, had sent a draft agreement to the Kurdistan Region. After receiving the draft, the KRG expressed its readiness to hand over its oil production to SOMO.

Production and Export Details

Under the deal, 50,000 barrels per day will go toward domestic consumption in the Kurdistan Region, while the remainder will be handed over to SOMO for export.

The agreement is based on previous contracts between the Kurdistan and oil companies, with 60 percent of oil produced allocated to the KRG and 40 percent to the companies. Of the 60 percent allocated to the KRG, 50,000 barrels are designated for domestic use.

The government has reached 230,000 barrels of oil per day. Of this amount, 50,000 barrels will go to the domestic market. The remaining 180,000 barrels will be divided, with 100,000 barrels (60 percent) delivered to SOMO and the remaining 80,000 barrels shared by the companies.

The agreement was achieved after extensive negotiations between the two governments and is seen as a milestone in resolving other outstanding issues, including the financial rights of Kurdistan Region public sector employees and revenue sharing.

Immediate Resumption Expected

Speaking to a Channel8, a source in the Iraqi Oil Ministry previously stated that the Iraqi government will be responsible for paying the financial entitlements of oil companies, estimated at $16 per barrel, as outlined in the budget law. Meanwhile, SOMO has completed all necessary preparations to resume exports.

The source highlighted that if no problems arise and the trilateral agreement is signed, oil exports will resume immediately.

Economic Impact of Suspension

Crude oil exports through the Iraq-Turkey pipeline have been suspended since March 25, 2023, due to ongoing legal and financial disputes.

Prior to the suspension, the Kurdistan Region was producing 408,038 barrels per day, with 358,970 barrels exported via the pipeline, according to Deloitte’s latest independent audit. The halt in exports has caused losses exceeding $20 billion for both the KRG and Iraq.