The semi-autonomous Kurdish region is set to boost production to 175,000 barrels per day (bpd), after the Kurdish Regional Government struck an agreement with the central Oil Ministry in Baghdad.
Speaking to reporters at an oil and gas conference in the Kurdish regional capital Erbil, the Kurdish Prime Minister Barham Salih said a deal had been done in the course of wide-ranging discussion aimed on resolving differences between Baghdad and Erbil.
“During our recent visit to Baghdad we also agreed that for next year the level of exports should increase to 175,000 barrels per day,” said Salih, according to a Reuters report.
Kurdish oil exports ran to 460,000 bpd in October, constrained by a halt in flows to the Ceyhan export pipeline and a decision by Norwegian firm DNO to divert more of its oil to the local Kurdish market.
Kurdish exports have been held below capacity as the foreign oil companies operating Kurdish fields have not been able to realize the full contract values for oil produced.
Under a deal struck in February this year, the KRG receives around half the sale price for oil for disbursement to oil companies, which is officially billed as a rebate for infrastrucre investment at Kurdish fields.
The rest is held in Baghdad pending a resolution to the four-year oil law dispute.
On 18 October, Exxon Mobil signed six Production sharing agreements north of the Green Line– the disputed border separating the Kurdish region from the rest of Iraq – with the KRG.
The move by the supermajor may force Baghdad to soften its stance in respect of production sharing contracts, which Hussain al-Sharistani, deputy prime minister with responsibility for energy, says are illegal.
