Oil companies say $16 fee set by Baghdad for Kurdish oil ‘temporary'

Rudaw Net

06-03-2025

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ERBIL, Kurdistan Region - Baghdad's $16 compensation rate per oil barrel for the Kurdistan Regional Government (KRG) and oil companies operating in the Region is not final and may change following the evaluation of an international consultant, who has yet to be selected, spokesperson for the oil companies said on Thursday amid ongoing efforts to resume Kurdish oil exports.
According to a recent amendment to the Iraqi budget law, the federal government is required to pay $16 per barrel to the KRG for production fees, which will then be reliably distributed to the producers.
Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told Rudaw on Thursday that they have submitted a list of 'internationally known independent evaluators' and emphasized the importance of transparency. He added that the consultant will determine the true cost of oil production.
'We need to know the scope of work for the international consultant who will evaluate the cost of production from each oil field. This is important. As you know, in the budget law, there is $16 per barrel of oil allocated for what we call cost recovery. And that is a temporary number,' said Caggins.
'The international consultant will come and review the papers, the financial records, and the contracts from each oil company, and then they will provide a true cost, an accurate cost of production and transportation for each oil field. If we do not know the scope of work, then that consultant may be working for years and years and years, or they may use some method of calculation that is not agreed to by the companies and the MNR [KRG's ministry of natural resources]. So therefore, it is important that we have a clear understanding of that consultant's scope of work,' he added.
Despite US pressure, Iraqi and Kurdish officials, along with international oil companies, met in Baghdad on Thursday but failed to reach any agreements. A senior American diplomat attended the meeting, a participant told Rudaw English.
'Nothing [was] achieved and there was no breakthrough,' the source told Rudaw English on the condition of anonymity but noted 'slight progress.'
They added that the participants agreed to form two committees, one of which has already been established, to convene early next week to address outstanding issues. These include structuring a sustainable debt resolution framework, defining the precise mandate of the third-party consultant Caggins mentioned, and ensuring a clear and mutually agreeable payment framework, whether in monetary terms or in-kind settlements.