SOMO:
The Director of the National Oil Marketing Company (SOMO), Ali Nizar Al-Shatri, confirmed on Friday that the implementation of the agreement to export oil from the Kurdistan Region’s fields will begin tomorrow, Saturday, noting that the proceeds will go to the federal budget.
Al-Shatri said in a press conference attended by an Iraqi News Agency (INA) correspondent: “We confirm what the Iraqi government announced regarding reaching a comprehensive, professional, and fair agreement with the Ministry of Natural Resources in the Kurdistan Region and with the companies operating and producing in the region’s fields, for the purpose of delivering the quantities of crude oil produced in those fields to the State Oil Marketing Company (SOMO), as well as pumping it to the Turkish port of Ceyhan, to begin the regular and legal export process through that port, in accordance with the international procedures, contracts, and principles adopted by the State Oil Marketing Company.”
He added, “The agreement stipulates that some quantities, approximately 50,000 barrels per day, will be allocated for local consumption and managed by the Ministry of Natural Resources in the Kurdistan Region.” He noted that “this long-awaited agreement comes to implement the three-year federal budget law for the years 2023, 2024, and 2025, and the recent amendment to the 2025 budget law, upon which negotiations began, lasting more than thirty months, in a professional, positive, and patriotic atmosphere. The goal was to re-establish control and regulate the export of oil produced from the Kurdistan Region, primarily through the north, so that it could return to global markets in a sound and internationally approved manner, with solid companies eagerly awaiting this agreement.”
He explained that “the agreement comes at a time when the European continent is in dire need of this type of oil as an alternative to the shortage of supplies from Russian oil and other sources,” noting that “this oil will be available at the Ceyhan oil port. As is well known, this port is located on the Mediterranean Sea, placing it at the heart of the European market, with the possibility of supplying the North and South American markets from this port with ease, professionalism, and transparency.”
He explained, “This agreement would not have been possible without the high level of professionalism, great support, and persistence and patience in constructive negotiations, which primarily took into consideration Iraq’s interests as a single, unified country from north to south, and its oil revenues, which are the primary source of support for the federal budget in accordance with the laws, especially the latest budget law.” He explained, “The agreement included direct negotiations with the producing companies in the region, and a comprehensive reassurance and strict mechanism were reached to guarantee their entitlements in accordance with the budget law.”
He stated, “The agreement stipulates that compensation will be $16 per barrel, delivered to the Oil Marketing Company. The amount will be deposited, based on the global price, into Iraq’s account at the US Federal Reserve in the full name of the Central Bank of Iraq.” He explained, “Compensation to the Ministry of Natural Resources in the Kurdistan Region will be $16 per barrel. Therefore, compensation will be in kind through barrels of oil produced from the same fields in the Kurdistan Region, in accordance with the compensation and payment-in-kind mechanism in place globally and applied in the south with contracting companies.”
He added, “The produced barrels of oil will be delivered to commercial companies that market them.” Globally, the amounts will be deposited into the regional government’s account to compensate the producing companies for this amount,” he noted, noting that “at this stage, a specialized international consulting firm will be contracted by the federal Ministry of Oil to re-evaluate production and transportation costs in the region’s producing fields to determine whether these costs are higher or lower than $16 per barrel, which will be considered an advance. Accordingly, compensation will be based on the consultant’s decision retroactively from the date the oil was received by the Oil Marketing Company, which is expected to begin on the morning of September 27, 2025, at 6:00 AM.”
He continued, “This agreement will not be temporary, but will establish long-term understandings. It will serve as a definitive end to all the disputes we witnessed in the previous phase, and will be a declaration of the seriousness of the federal government, the Kurdistan Regional Government, and the companies operating in Iraq to commit to implementing it and ending all forms of dispute, suspicion of smuggling, or production outside government control.”
