🛢️ BAGHDAD REFUSES TO SIGN $16 PER BARREL AGREEMENT WITH OIL COMPANIES ⚠️💸

1 month ago 4

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📌 HIGHLIGHTS: A Deal on the Edge – Baghdad Drags Its Feet on Oil Payments 📌

🚫 1. Baghdad Says “No” (For Now)

The Iraqi Ministry of Oil has refused to sign a tripartite agreement with the Kurdistan Region’s Ministry of Natural Resources and international oil companies regarding the $16 per barrel fee for production and transport.
👉 This amount was approved for a temporary 60-day period following a recent budget law amendment.
But Baghdad is refusing to commit, claiming it's not their responsibility since the original contracts were signed with Erbil.

📊 2. What's the $16 About?

Iraq’s Parliament amended the budget law in February, allocating $16 per barrel to cover production and transportation costs.
A technical consulting firm is now analyzing the actual costs, but companies want that $16 guarantee now—for just 90 days, until the audit is done.

⚖️ 3. Legal Uncertainty = Big Risk

Oil companies are concerned:

❓ Who’s liable if Baghdad doesn’t pay?
❓ Who do they sue without a written agreement?

Baghdad says the contract structures must first be reviewed to ensure they comply with federal oil laws.

🧾 4. Baghdad Blames the Contracts

Officials say these oil deals were signed by the Kurdistan Regional Government (KRG) and not Baghdad, so the Iraqi Ministry of Oil doesn’t feel responsible for paying out the $16.
They insist the issue should be handled via budget law, not direct contracts. 🧷

🚚 5. Exports Are Stuck in the Middle

Under the latest agreement with Erbil, the KRG is to deliver:

230,000 barrels/day to SOMO (State Oil Marketing Organization)
50,000 barrels/day for local Kurdish consumption
Yet without funding clarity, exports are in limbo, and companies are hesitant.

🤝 6. Agreement With No Teeth

Yes, a general mechanism was agreed on last month between Baghdad and Erbil, but it lacks a signed payment agreement—which means no legal obligation to the companies operating in the region.

📣 FINAL THOUGHTS:

Baghdad’s delay tactics could put Kurdistan’s oil exports at risk, weaken investor confidence, and worsen tensions between regional and federal governments. Until there’s a formal agreement, this $16-per-barrel battle could keep the HCL and oil law on hold indefinitely. ⚠️⏳