Iraq, KRG reach deal to resume oil exports: Kurdish official
Turkey had stopped extracting oil from the Kurdish region to its port in Ceyhan after Iraq won an arbitration case.
The federal government of Iraq and the Kurdistan Regional Government (KRG) have reached an initial agreement to resume northern oil exports this week, a KRG spokesman said.
“After several meetings between the KRG and the federal government, an initial agreement has been reached to jointly resume oil exports through Ceyhan. [in Turkey] this week,” Lawk Ghafuri, head of foreign media affairs for the KRG, wrote in a Twitter post.
“This agreement will remain in effect until the Oil and Gas Act is passed by the Iraqi parliament,” Ghafuri said.
After several meetings between the Kurdistan Regional Government and the Federal Government, a first agreement was reached this week to resume oil exports through Ceyhan. This agreement will remain in effect until the draft oil and gas bill is passed by the Iraqi parliament.
— Lawk Ghafuri (@LawkGhafuri) April 2, 2023
Oil exports were halted on March 25 after an arbitration court in Paris ruled that Turkey had violated a 1973 agreement with Iraq by exporting oil from the semi-autonomous Kurdish region without Baghdad’s permission between 2014 and 2018.
The oil was exported by pipeline from the Kurdish Fish-Khabur border to the Turkish port of Ceyhan.
Several companies last week suspended operations or began stockpiling output following the court’s decision, including Norwegian oil and gas operator DNO and Canada-based Forza Petroleum.
U.S.-based HKN Energy said in a statement last week that it would halt its “activities within a week if no resolution is reached.”
Overall, the court ruling had led to the shutdown of about 450,000 barrels per day (bpd) — about 0.5 percent of the world’s oil supply. Still, the move had an impact on oil prices, which were back close to $80, according to Reuters.
The resumption of pipeline flows from the KRG will still require approval from Turkey.
“A letter of request to resume oil flows will be sent from Baghdad to Ankara,” a KRG official told Reuters.
Sources told Reuters last week that Turkey wants a second case related to the 1973 agreement with Iraq before the pipeline reopens.
Oil exports have been a sticking point for Iraq and its semi-autonomous region.
Tensions rose last February after the Iraqi Supreme Court made a landmark decision by ruling that a 2007 oil and gas law regulating the KRG’s oil industry was unconstitutional.
Mohammed Shia al-Sudani, who became Iraq’s prime minister last October, has worked to quell tensions since taking office.