ERBIL, Kurdistan Region – The Kurdistan Region’s long-suspended oil exports could be restarted later this year if the Iraqi parliament accepts an amendment proposed by the federal government, Iraq’s foreign minister said Thursday.

Last week, the Iraqi government approved a proposal to amend federal budget items that allow compensation for oil production and transportation costs to companies operating in the Kurdistan Region, setting the rate at $16 per barrel. The proposal, which has not yet been finalized by the parliament, aims to restart oil exports from the Region.

“We sent this resolution to the parliament because it falls under the budget law and we hope that the legislature will vote on this resolution these days,” Iraqi Foreign Minister Fuad Hussein told Rudaw’s Sangar Abdalrahman on the sidelines of the COP29 climate summit in Baku. , Azerbaijan.

“If the parliament accepts this (amendment), the Kurdistan Region will be able to export oil before the new year,” the minister said.

Oil exports from the Kurdistan Region via the Iraq-Türkiye pipeline have been suspended since March 2023 after a Paris-based arbitration court ruled in favor of Baghdad over Ankara. Oil independently since 2014.

Hüseyin also stated that negotiations with Ankara on the issue are continuing.

The Kurdistan Petroleum Industry Association (APIKUR), an umbrella group of international oil companies operating in the Kurdistan Region, welcomed the proposal presented by Baghdad on Thursday.

Iraq’s three-year federal budget bill, passed in June 2023, set the rate for a barrel of oil at $6.90, with international oil companies (IOCs) demanding three times that amount.

Before the halt, Erbil was exporting about 400,000 barrels of oil per day through the pipeline, in addition to about 75,000 barrels of Kirkuk oil.

When the KRG started its independent oil sector, it signed production sharing agreements with international oil companies. In this model, while oil companies cover the entire cost of production, the KRG receives the lion’s share of the profits from successful projects.

Baghdad has repeatedly said these contracts violate the constitution and must be changed to match the federal government’s preferred service contracts so exports can continue.

While international calls were made for the restart of Kurdish oil, the US said ending this stoppage would be “mutually beneficial” for all parties.