Iraq's Kurdistan region, which seeks to become a net gas exporter to regional markets, is capable of making up for at least part of the oil shortfall that Europe is facing, its prime minister said.
Masrour Barzani told the Global Energy Forum that this was conditional on whether “our partners in Baghdad are prepared to work with us".
The semi-autonomous northern Iraqi region continues to develop its export potential and already has “an oil export capacity, which acts as an essential economic lifeline for us and a vital potential supply for our partners”, he said on Monday.
Iraq's Kurdistan region has aspirations to become an energy centre in the region and wants to transform into a net exporter of gas to the rest of Iraq, Turkey and Europe in the near future.
“I am confident that [Iraqi] Kurdistan will soon become an important source of energy [to meet] the world's growing demand,” he said.
The US and its allies in Europe are looking to cut their dependence on Russian hydrocarbons due to Moscow's military offensive in Ukraine.
The US announced earlier this month that it would ban crude, gas and coal imports from Russia, while the UK and Europe have said they will phase out imports of Russian oil and gas during the course of the year.
Europe, which relies on Russia for about 40 per cent of its gas and about 30 per cent of its crude imports, is looking at alternative sources to meet its energy needs, including markets in the Middle East.
The last few years have been transformational in terms of the development of Kurdistan’s oil and gas sector.
In the first half of 2021, the region exported 77.35 million barrels through the Kurdistan export pipeline and also allocated 3.95 million barrels to local refineries, according to an official government report audited by Deloitte.
The region generated $4.1 billion in revenue from crude oil export sales during the period, with net revenue after payments to oil producers, pipeline operators and repayments to the buyers reaching $1.74bn.
However, the region needs investment to boost gas production capacity as demand in the local market is already double the current production rate, Mr Barzani said.
He stressed that Iraq's Kurdistan region will become an important part of the global energy supply chain with the help of partners and oil and gas companies that have remained committed to it despite challenges.
The government values its partnership with energy companies and a recent ruling by Iraq's Federal Supreme court does not affect its commitment and contracts with investors in the oil and gas sector, he said.
Mr Barzani said the ruling has no merit and Kurdistan will do “all in its power” to protect the contracts that have been reaffirmed by legal experts and international courts.
“I would like to reiterate to you all that my government remains committed to the contracts that have been signed between us. These contracts are in line with our oil and gas law and the Iraqi constitution, and they are a bedrock of our shared future,” he said.
“Investors in [Iraqi] Kurdistan have the right to receive regular payments and ensuring that happens is the core focus of my Cabinet.”