The international oil companies operating in Iraq's semi-autonomous region of Kurdistan will not be producing oil for exports until they have clarity about overdue and future payments and sales terms, Norwegian firm DNO, one of the six members of the Association of the Petroleum Industry of Kurdistan (APIKUR), said on Thursday.
Currently, Iraqi federal government officials and the Kurdistan region's petroleum association are discussing the resumption of crude flows through the Iraq-Turkey pipeline to the Turkish Mediterranean port of Ceyhan.
Kurdistan's crude oil exports were halted on March 25 by the federal government of Iraq. The halt came after the International Chamber of Commerce ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan.
Iraq, OPEC's second-largest producer after Saudi Arabia, is currently exporting oil only via its southern oil export terminals. Around 450,000 bpd of exports from the northern fields and from Kurdistan continue to be shut in due to the dispute.
In a statement on Thursday, Norway's DNO said: "According to a recent statement by the Prime Minister of Iraq, Baghdad and Ankara are prepared to recommence flows from Kurdistan as soon as certain unspecified agreements between the international oil companies and Iraq and Erbil are reached."
"In response, the Association of the Petroleum Industry of Kurdistan (APIKUR), of which DNO is one of six members, has stated that the member companies will not be in a position to produce oil for pipeline exports until it is clear how they will be paid for their contractual entitlements of oil already sold and delivered for export and for future sales of such oil for export."
The members of the association are owed nearly $1 billion in overdue and unpaid arrears, according to DNO.
Representatives of the companies met with Iraqi officials in Dubai on Wednesday and offered to sell the crude from their fields in Kurdistan directly to the federal government-to Iraq's state marketing firm SOMO.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More