Al-Sudani called on both the Kurdistan Regional Government (KRG) and the Federal Ministry of Oil to immediately implement the amendment. [Getty]
The Iraqi government, Kurdish authorities, and international oil companies have collectively welcomed a recent amendment to Iraq’s federal budget, aimed at restarting oil exports from the Kurdistan Region through the Iraq-Turkey pipeline after a near two-year suspension. Â
On Sunday, Iraq’s parliament endorsed a budget amendment to subsidize production costs for international oil companies operating in the semi-autonomous Kurdistan Region. This adjustment raises the compensation rate to $16 per barrel, significantly higher than the previous rate of $7.9 per barrel for transport and production costs.
The flow of oil through the Kurdistan Regional Government’s (KRG) pipeline was halted by Turkey in March 2023 following an International Chamber of Commerce ruling that required Ankara to compensate Baghdad $1.5 billion for unauthorized exports by the KRG between 2014 and 2018, which led to an estimated loss of $19 billion in revenue for Iraq.
In a statement, Basim Al-Awadi, spokesperson for the Iraqi government, relayed Prime Minister Mohammed Shia Al-Sudani’s appreciation for the “responsible and constructive step” taken by the Council of Representatives in approving the amendment. This measure, he said, bolsters political stability and showcases the high level of cooperation between the government and the Council of Representatives.
Sudani called on both the Kurdistan Regional Government (KRG) and the Federal Ministry of Oil to immediately implement the amendment to optimize investment in natural resources, particularly oil.
Masrour Barzani, the KRG Prime Minister, also supported the legislative change, thanking those who backed the amendment and the KRG negotiating team for addressing the salary issue.
“I hope that this positive step in amending the budget law will be the beginning of resolving all other disputes and the federal government’s commitment to provide financial entitlements of the Kurdistan Region,” Barzani
I thank everyone who supported the amendment. I also thank the KRG negotiating team for their efforts to put in place a mechanism to resolve the salary issue.
— Masrour Barzani (@masrourbarzani) February 2, 2025 “>wrote on the X platform.Â
What happens next?
In cooperation with the KRG’s Ministry of Natural Resources, Iraq’s oil ministry plans to hire an international consultant within 60 days to evaluate fair production and transportation costs. Should no consensus be reached, the Iraqi cabinet will independently appoint a consultancy.
The budget amendment, proposed by Iraq’s cabinet in November 2024, also requires that the KRG transfer its oil output to the state-controlled State Oil Marketing Organization (SOMO).
The Association of the Petroleum Industry of Kurdistan (APIKUR) has welcomed this legislative change. Myles B. Caggins III, APIKUR spokesman, told The New Arab, “APIKUR welcomes the Iraqi Council of Representatives’ budget law amendment and remains focused on reaching agreements to restore oil exports through the Iraq-Turkey Pipeline.”
Soran Omar, a lawmaker from the Kurdistan Justice Group in the Iraqi parliament, stated to TNA, “The Kurdistan Region’s oil will be handed over to the SOMO company. In return, for 60 days, the region will receive $16 for each barrel of oil produced and delivered to SOMO.” He added, “During the 60 days, an international company will be brought in to determine the actual cost of producing a barrel of oil in the region.”
“I hope both governments remain committed to implementing this agreement. The implementation will take place after its publication in the Iraqi Gazette. If the Kurdistan Region complies, it will receive its full budget and salaries,” Omar continued.
Khor Mor fire
Separately, Sudani ordered the formation of a technical security committee to investigate the circumstances of a fire incident at the Khor Mor gas field in Sulaimaniyah Province.
The Security Media Cell reported, “The incident led to a minor fire near the fuel tank which did not affect it, with no human or material losses, nor did it impact the operation and production of the field.”
Sudani ordered a security committee to investigate the incident, stressing that attempts to harm the economy and public welfare will not be tolerated, and security forces will take firm action against any threats.
The Khor Mor gas field, located southwest of Sulaimaniyah, is being developed by the UAE’s Dana Gas company and produces natural gas for almost 80 per cent of the Kurdistan region’s power plants. Â
The Sulaimaniyah-based General Directorate of Counter Terrorism in a statement revealed that a suicide drone attack was directed at the Khor Mor gas field late on Sunday. “According to intelligence reports, the drone was launched from the Bashir area and was carried out by militia and outlaw groups. The attack did not result in any casualties or material damage, and both the field and the Dana Gas company are fully secured,” reads the statement.Â
It also added that security agencies assure citizens that they are closely monitoring this violation and will announce any new information regarding this matter.
Four Yemeni nationals were killed and two others were wounded when a suicide drone hit the Khor Mor gas field in Iraq’s semi-autonomous Kurdistan region late on 26 April. The KRG has blamed the attack on the Iran-backed militias in Iraq.
Dana Gas (PJSC) announced that a drone targeted the vicinity of the Khor Mor gas field and confirmed that the attack caused no injuries or damage to production facilities, and operations continue uninterrupted under strict security protocols.
Iraq heavily depends on imported gas from Iran to produce electricity, and recently Al-Sudani said his government is planning to purchase gas from the Khor Mor gas field and connect the field with power plants in Kirkuk via a new gas pipeline. Â
