It has been decided that one month after the resumption of oil production and exports, an initial assessment will be conducted. This assessment consists of a meeting between active oil companies and the Ministry of Natural Resources of the Kurdistan Regional Government, scheduled to take place on October 27, 2025. This meeting holds strategic significance following the tripartite agreement between Baghdad, Erbil, and International Oil Companies (IOCs), which in September 2025 resumed oil exports under the new framework of the Iraqi State Oil Marketing Company (SOMO). This meeting is not only a platform for evaluating the progress of the first month following the resumption of exports, but also an opportunity to discuss long-term goals and conditions and to ensure the parties’ commitment to the emphases presented at the July 12 meeting of this year. Stability in this regard is crucial not only for its economic impact on the Region, but also for Iraq’s credibility as an oil exporter and its commitments to OPEC.
One of the main topics on the agenda may be payment mechanisms and financial rights. According to the new agreement, companies receive crude oil quantities as debt repayment rather than cash payments. Here, discussions intensify on how to price, distribute, and market these crude oil quantities, while obtaining assurance from Baghdad or SOMO regarding their full commitment to these debt repayments. From a logistical perspective, access to oil pipelines and ensuring the continuity of oil flow through the Iraq-Turkey pipeline (Ceyhan) after nearly 18 months of shutdown is another critical issue. Coordination with Turkey on technical and legal guarantees to protect against any future disruptions to operations is essential.
Production levels and field operations may be another main focus of the meeting, particularly regarding agreement on specified production quantities expected to increase from 190,000 barrels to approximately 230,000 and then to approximately more or less 400,000 barrels per day. The allocation of a portion of this production for domestic consumption (currently approximately 50,000 barrels) alongside exports requires detailed planning. Additionally, addressing operational complications due to delayed investments during the export suspension period is another primary concern for oil companies.
Companies are likely to request clarification on the terms of cost recovery under the new framework, particularly since the Kurdistan Regional Government’s previous Production Sharing Contracts (PSCs) are now effectively placed under SOMO’s marketing system. Here, legal assurance against changes or political disagreements that could cause the Kurdistan Regional Government to retreat under pressure from the Iraqi federal government is essential for restoring investor confidence.
The situation of the Khurmala field, which is part of the Kirkuk geological structure and has political sensitivity, requires appropriate resolution, as this field’s oil has played a major role in meeting domestic needs and exports, and maintaining its production level (100-120 thousand barrels per day) is crucial for supporting energy infrastructure.
The deep concerns of companies must also be addressed, and the Ministry of Natural Resources must prepare itself for convincing responses. For example, companies such as DNO, Gulf Keystone Petroleum, and ShaMaran Petroleum have several major concerns, including the recovery of accumulated debts totaling approximately $300 million for DNO alone, which has a negative impact on investor confidence and the financial capacity of companies. Therefore, a clear payment mechanism for past and future debts is essential. Additionally, companies want to ensure that their oil share under SOMO’s new sales system is transparent and that they receive their shares on time, as any uncertainty in this regard causes financial problems and revenue reduction. The approval of new projects, such as DNO’s plan for eight new wells for 2026, and any delay due to administrative negligence affects production increases and revenue. Export stability is crucial for Gulf Keystone Petroleum, which produces approximately 45,000 barrels per day, as previous export disruptions have caused instability in the company’s share prices.
Regarding the gas sector, the development strategy and security of Khor Mor gas facilities (especially after the missile attacks) is the greatest concern. The expansion project to increase production from 500 million cubic feet per day to 750 million cubic feet per day and then to one billion cubic feet per day requires security guarantees and long-term agreements for gas sales to power stations. In the future, the issue of gas exports to Turkey and Europe under the SOMO system could be a major revenue source and make the Kurdistan Region one of the main players in the regional energy market, so clarifying this issue is very important. The undeveloped fields of Bina Bawi and Miran, along with the progress of the Chemchemal field toward production commencement, require a clear financial and political framework to initiate development projects, and the commitment of the Kurdistan Regional Government and Baghdad to prioritizing gas development, including partnership with SOMO, is crucial.
Overall, companies will certainly once again request the recovery of their debts from the Kurdistan Regional Government, which amount to approximately $1 billion, as the non-recovery of these debts causes reduced investor confidence and delays in their projects. Ensuring that their contracts are legally protected and not subject to changes is very important. The issue of transparency and auditing, which both Baghdad and Erbil have promised, must be realized through an independent auditing mechanism to ensure fair accounting of financial rights. In the long term, the question of the future legal framework remains: will the Kurdistan Regional Government’s contracts be officially recognized under Iraqi federal law, or will they gradually be replaced by service contracts? This question will have a major impact on investment security and the future of the energy sector in the Region.
* Translated and Edited by Nawroz Mohammed
