LONDON – Bracewell (UK) LLP advised a collective of International Oil Companies (IOCs), operating in the Kurdistan Region of Iraq (Kurdistan), on the negotiation of agreements with the Kurdistan Regional Government (KRG) and the Federal Government of Iraq (FGI) to enable the restart of international crude exports from the Kurdistan Region of Iraq (KRI), via the Iraq-Turkey Pipeline.
The agreements to resume oil exports from the KRI are based on the Iraqi Budget Law amendment in February 2025 and Iraq’s recognition of the KRI Production Sharing Contracts (PSCs). The Budget Law provides for an initial period of approximately three months during which IOCs will be compensated at US$16 per barrel on all barrels produced for the cost of production and transportation, resulting in similar economics to the current KRI local oil sales, with a reconciliation to full PSC entitlement following a review of the IOC invoices and contractual entitlements by an industry consultant. The Iraqi State Organization for Marketing of Oil (SOMO) will market the KRI crude at the Kirkuk blend official selling price, and IOCs will be paid in arrears from the sale of their allocation at Ceyhan via their nominated trader. The agreements also provide that the IOCs and KRG will continue discussions about recovering outstanding accounts receivable from past oil sales.
Ben James, who led the Bracewell team, commented: “We are delighted to have assisted our clients in achieving this important milestone in their quest to restart international oil exports from KRI and achieve international market prices for their full contractual entitlement of crude oil.”
Bracewell lawyers involved in the transaction include:
Partners: Ben T. James, Adam T. Waszkiewicz, Robert P. Meade and John Gilbert
Senior Associates: Adam P. Quigley and Danielle Altink
