Pipeline oil exports from Iraq's Kurdistan region to Türkiye had yet to restart on Tuesday despite hopes of a deal to end the deadlock, as two key producers asked for debt repayment guarantees.
The deal between Iraq's federal and Kurdish regional governments and oil firms aims to resume exports of about 230,000 barrels per day of oil from Kurdistan to the global market via Türkiye, halted since March 2023.
Iraq's cabinet met on Tuesday with the deal on the agenda, oil officials said. It was not immediately clear if it would go ahead without DNO and Genel's participation, according to Reuters.
Bijan Mossavar-Rahmani, executive chairman of Norway's DNO, the largest producer in the semi-autonomous Kurdish region, proposed "easy fixes that can be quickly agreed" to the Kurdistan Regional Government (KRG), DNO said, without saying what they were. Its UK-based joint venture partner Genel said it had yet to sign as it wanted certain adjustments, and assurances on repayments of arrears.
Kurdistan has accumulated around $1 billion in arrears to producers. DNO's estimated share of overdue receivables is about $300 million.
"Importantly, as the largest producer, the arrears owed to us by the KRG dwarf those of many of the others," Mossavar-Rahmani said.
The Kirkuk-Ceyhan pipeline shut after the International Chamber of Commerce ordered Türkiye to pay Iraq $1.5 billion in damages for unauthorized exports by the KRG. Türkiye is appealing but says it is ready to restart the pipeline.
Reuters reported last week that Iraq, OPEC's second-largest producer, had given preliminary approval to a plan to restart exports from Kurdistan.
In the interim plan, the KRG commits to delivering at least 230,000 bpd to Iraq's state oil marketer SOMO, while keeping an additional 50,000 bpd for local use.
An independent trader would handle sales from Turkish Ceyhan port using SOMO's official prices.
Each month, SOMO would allocate crude equivalent to the value of Kurdish deliveries, calculated by multiplying volumes by $16 and dividing by SOMO’s Kirkuk price to Europe.
For each barrel sold, $16 would be transferred to an escrow account and distributed proportionally to producers. The remaining revenue would go to SOMO.
Oil prices rose on reports of the deal stalling, reversing earlier losses on oversupply concerns.
Iraq has frequently produced above the level agreed with OPEC+ and earlier this month was one of several countries that OPEC said would cut output through June to compensate for past overproduction. Iraq is meant to scale back a cumulative 1.4 million bpd between August 2025 and June 2026.
Iraq exports around 3.4 million barrels of oil per day from its southern ports.
