Shamaran to welcome oil export restart from Iraq

Executive Summary

• Shamaran Petroleum has executed interim agreements with the Kurdistan Regional Government (KRG), the federal government of Iraq, and international oil companies to restart oil exports via the Iraq-Turkiye pipeline within days.
• The agreements are based on the February 2025 Iraqi Budget Law amendment, establishing a temporary compensation mechanism of $16 USD per barrel for production and transportation costs, with a future reconciliation to full Production Sharing Contract (PSC) entitlements.
• Production at Shamaran’s operated blocks has surged, with the Sarsang block returning to full capacity ahead of schedule and the Atrush block producing approximately 35,000 barrels per day.

Key Details

• Export Restart: Interim agreements enable the restart of international oil exports by pipeline from the Kurdistan region of Iraq within a matter of days.
• Compensation Structure: Under the Iraqi Budget Law amendment, International Oil Companies (IOCs) will be compensated at $16 (U.S.) per barrel for the cost of production and transportation for an initial period of approximately three months.
• Reconciliation Mechanism: The $16/bbl rate mirrors current KRI local oil sales economics; a reconciliation to full PSC entitlement will occur following a review of IOC invoices and contractual entitlements by an industry consultant.
• Marketing and Payment: The Iraqi State Organization for Marketing of Oil will market KRI crude at the Kirkuk blend official selling price. IOCs will be paid in arrears from the sale of their allocation at Ceyhan through their nominated trader.
• Outstanding Accounts: Agreements include provisions for IOCs and the KRG to continue discussions regarding the recovery of outstanding accounts receivable from past oil sales.
• Sarsang Block Production: Production has returned to full capacity nearly one month ahead of schedule.
• Atrush Block Production: Currently producing approximately 35,000 barrels of oil per day.
• Shamaran Interests: Indirectly holds a 50% working interest in the Atrush block and an 18% working interest in the Sarsang block.

Notable Quotes

• "We welcome the resumption of oil exports from the Kurdistan region and thank our operating partner, HKN Energy, for leading the negotiations. Pipeline exports are critical for the future stability and prosperity of both the Kurdistan region and federal Iraq. We believe these agreements will benefit all Iraqis and allow IOCs to continue investing in the region while receiving the contractual value of the oil produced." — Garrett Soden, President and CEO