ERBIL, Kurdistan Region of Iraq – Two major international oil producers operating in the Kurdistan Region on Friday welcomed the recent tripartite agreement to resume Kurdish oil exports, however, noting that they will continue to sell their share of sales in oil to local buyers.

The Iraqi oil ministry on Wednesday announced that an agreement has been reached between Erbil, Baghdad, and international oil companies (IOCs), whereby the Kurdistan Region will deliver “all crude oil” produced from its fields to the State Organization for Marketing of Oil (SOMO), apart from the quantities allocated for domestic use, which will later be exported through the Iraq-Turkey pipeline.

DNO ASA, a Norwegian oil firm and the Kurdistan Region’s largest international oil producer, said in a statement that starting Saturday, in accordance with the recent agreement, the company will deliver 38,000 barrels per day to the Kurdistan Regional Government (KRG) to be exported through the Iraq-Turkey pipeline.

The 38,000 barrels accounts for the KRG’s share of sales from the DNO-operated Tawke field in Duhok.

Nonetheless, the firm stressed: “The balance of the oil, representing the share of sales the foreign contractor group consisting of DNO and Genel Energy International Limited, currently averaging 30,000 barrels a day, will continue to be sold to local buyers under existing contracts.”

“We have elected not to engage directly in exports at this time and will continue to sell our oil on a monthly, cash-and-carry, basis to our buyers at a per barrel price in the low USD 30s,” the statement cited DNO Executive Chairman Bijan Mossavar-Rahmani as saying.

The announcement from the Norwegian company said that, under the recent agreement, the first payment is expected in mid-December, while they can only support their recent expansion program “with immediate, predictable and continuous flow of funds.”

“Maybe looking back we will have left some money on the table, maybe not, but surely we will generate significantly greater value from the investments we are making not just for us, but for all Iraqis,” the chairman added.

Genel Energy, a British firm also working in Tawke field, announced that they too will continue to sell oil produced from the field “domestically on a cash up front basis,” noting DNO’s statement issued earlier in the day.

The Kurdistan Region’s oil exports through Turkey’s Ceyhan pipeline have been halted since March 2023. Erbil and Baghdad have since announced several agreements to resume exports, but the process had been blocked due to international oil producers demanding payment surety, transparent implementation of Iraq’s budget law stipulations, and resolution of payments that are in arrears before resuming the work.

The export of the Kurdistan Region’s oil to international markets through Turkey’s Ceyhan pipeline is set to restart at 6 am (Erbil time) on Saturday, September 27, according to a statement released by KRG Cabinet Secretary Amanj Raheem on Thursday.