Iraqi deputies said that Parliament approved, today, Sunday, a budget amendment aimed at compensating international oil companies operating in the Kurdistan region, in order to settle a dispute and resume oil exports from the north and accelerate their pace.
They added that the rate in the compensation plan is $ 16 a barrel. Article 12 in the tripartite budget voted on by the House of Representatives on June 12, 2023, stipulated that the oil companies operating in the Kurdistan region are granted 6 dollars for each barrel of extractive, which was then rejected by foreign companies operating in the region.
These companies believe that calculating equal production costs for the oil barrel in the region and the oil barrel in southern Iraq is not possible, especially since the oil fields in Iraqi Kurdistan are located in difficult and mountainous areas and the cost of production is more than the cost of production in the south.
According to the new amendment, the Federal Ministry of Finance is obligated to compensate the region for the sovereign expenditures associated with the production and transportation of Muslim oil to the oil marketing company (Sumo) or the Federal Oil Ministry.
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According to Iraqi media, the costs will be determined fairly for each field separately, based on an evaluation provided by an international technical advisory institution that will be appointed within 60 days of the law entered into force.
The amendment also stipulated that the Federal Ministry of Finance will pay compensation to the region based on the estimated costs, provided that the previous compensation is calculated according to the number of barrels received.
According to the decision, the delivery of oil produced in the region will be started immediately to Sumo or the Federal Ministry of Oil, provided that the federal government will provide a $ 16 advance for per barrel, which will be settled later after the completion of the work of the specialized technical advisor.
This amendment comes in the context of the ongoing negotiations between the Kurdistan Regional Government and the federal government regarding the oil export file and revenue sharing, as recent years have witnessed sharp differences over the mechanism of surrender oil and the returns of its sale.
