Kurdistan ‘Surprised’ by Iraq Parliament Delaying Oil Cost Vote
(Bloomberg) -- The Kurdistan Regional Government’s prime minister said he was “surprised” by changes to an approved plan for oil production costs and the Iraqi parliament not voting on it this week, potentially creating a fresh hurdle in restarting exports that have been halted for almost two years.
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Iraq’s cabinet in November had approved a plan to pay $16 a barrel for oil production and transportation from the Kurdistan region. Following two readings, the parliament was scheduled to vote on the budget on Tuesday, but it was deferred after some changes were made unexpectedly, KRG Prime Minister Masrour Barzani said.
Aso Fraidoon, a Kurdish lawmaker in the parliament’s oil and gas committee, said the vote was pushed back to allow for more political discussions as some lawmakers raised objections on the level of payment.
“We were all expecting the parliament to vote on a draft that was agreed to by all of us with the federal government, Kurdistan region, and the international oil companies,” Barzani said he said in an interview during the World Economic Forum in Davos. “I was very surprised” that there’s a alternative draft “without consulting with us,” he said.
A spokesman for the Iraqi federal government didn’t have any immediate comments.
The developments in the parliament highlight the saga of cost disputes that have held up full restart of the key pipeline that can carry about half a million barrels a day of oil from Kurdistan to Turkey’s Mediterranean port of Ceyhan. Iraqi’s federal government, the Kurdish regional administration and the oil companies operating in the region have at various times blamed each other for the delays.
The impasse kicked off in March 2023 after Turkey halted the pipeline following an arbitration court’s order to pay Iraq $1.5 billion. Ankara, which claimed the pipe was shut because it needed repairs after two massive earthquakes in February that year, later said that it was ready for operations and it was up to Iraq to resume flows.
Restarting the pipeline may also pose a dilemma for Baghdad, which is obligated to cut crude output as part of an OPEC+ agreement but has been struggling to adhere to promised cutbacks.
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