Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) – Oil exports from the Kurdistan Region dropped during July due to sabotage of the pipeline through Turkey.

According to the monthly Kurdistan Regional Government, KRG, oil export report for July, 16,019,090 barrels of crude oil (average 516,745 bpd) were exported through the pipeline through Turkey.  This is a 6.5 per cent decline over June when the KRG exported 17,130,639 barrels (average 571,021 bpd).

In an earlier statement, the KRG Ministry of Natural Resources said that since 27 July “there have been sabotage attacks and attempted thefts on the pipelines that carry crude oil from the Kurdistan Region to Ceyhan in Turkey”. According to the monthly export report, stoppage occurred “in the flow of crude oil to Ceyhan for 111 hours”.

Of the total amount of oil exported in July, fields operated by the KRG supplied 12,020,683 barrels (average 387,764 bpd) while fields operated by the North Oil Company (NOC) supplied 3,998,407 barrels (average 128,981 bpd).

Iraq’s State Oil Marketing Company, SOMO, in Ceyhan received 2,201,540 barrels (average 71,017 bpd). The KRG intended to deliver to SOMO a further two million barrels at the end of July, but was unable to do so due to the pipeline interruption.

According to the report, the KRG continued its direct oil sales in Ceyhan in July in order to compensate the Region for the budget shortfalls from the federal government and to pay debts incurred during 2014.

The KRG has, however, announced it will continue to work with its counterparts in the federal government to reach a resolution on all outstanding oil and gas issues per the joint statement of June 17, 2015 by the KRG’s Regional Council for Oil and Gas Affairs and the five political parties in the Kurdistan Regional Government.

Earlier this week, the KRG Ministry of Natural Resources announced that from September 2015 onwards, the KRG will on a monthly basis allocate a portion of the revenue from its direct crude oil sales to the producing international oil companies, IOCs.  Further, with exports anticipated to increase in early 2016, the KRG envisages making additional revenue available. This is important for IOCs to maintain and increase production levels.

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) - According to the April 2015 report published by the Kurdistan Regional Government, KRG, Ministry of Natural Resources, KRG commitments under the 2015 Federal Budget Law have been met, and oil production has reached record levels.

According to an agreement on oil export and budget, reached last December between the KRG and the Federal Government of Iraq, Kurdistan Region is committed to export 550,000 bpd (barrels per day) in return for a budget entitlement close to one billion US dollars per month to be paid by the federal government. The agreement was approved within the framework of the Iraqi Federal Budget Law for 2015.

In April, the Kurdistan Regional Government delivered to the Iraqi State Oil Marketing Company, SOMO, a total 16,878,985 barrels for an average of 562,633 bpd.

Kurdistan Region oilfields supplied 12,457,371 barrels averaging 415,246 bpd, while North Oil Company (NOC) oilfields, Kirkuk, supplied 4,421,614 barrels averaging 147,387 bpd. Oil from both sources is exported through a KRG pipeline to the Turkish oil export facility at Ceyhan.

In March the KRG published cumulative export data, noting that while it met its oil export commitments, the KRG has yet to receive its full entitlement per agreement under the Federal Budget Law of 2015.

Last week, in two separate meetings, the Kurdistan Region Prime Minister and a number of members of the Council of Ministers, met Kurdistan Region Baghdad representatives, and the Speaker of the Kurdistan Parliament along with Parliamentary groups.

The Prime Minister reaffirmed KRG’s commitment to the December agreement and the Iraqi 2015 Federal Budget Law. He pointed out, however, that if talks with Baghdad do not produce positive results and Baghdad continues its breach of the Federal Budget Law, then the KRG will have to consider other options to stabilise the Region’s financial security.