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Iraq has lost billions of dollars as a result of the closure of the Kirkuk-Cehyan pipeline that shipped crude oil from Kurdistan to Europe via Turkey, an Iraqi MP has said.
Oil flows through the 970-kilometre pipeline were completely halted by Turkey in March 2023 after the International Chamber of Commerce ordered Ankara to pay Baghdad damages of $1.5 billion for unauthorised exports by Kurdistan between 2014 and 2018.
OPEC’s second largest oil producer agreed with the Kurdistan regional government (KRG) at the weekend to resume oil exports but flow hinges on a final agreement between Baghdad and Ankara.
“The agreement between Iraq and KRG after more than two years of disruption is a crucial step to end the crisis that has cost Iraq billions of dollars,” said Bassim Al-Gharibawi, a member of parliament’s oil and gas committee.
He told the London-based Qatari news website Al-Arabi Al-Jadeed that under the agreement, the North Oil Company will store crude produced in Kurdistan in its facilities in Kirkuk before it is pumped into the pipeline after a final agreement with Turkey.
“This mechanism allows for the resumption of oil flow via the pipeline within a few days after technical and logistic preparations are competed…the resumption of oil exports will positively affect Iraq’s revenue after large losses,” he said.
In its report, the website said exports would start at around 100,000 barrels per day (bpd)before increasing gradually to nearly 300,000 bpd.
Officials said last week that Kurdistan would be allowed to retain 50,000 bpd from its oil production for domestic consumption.
Iraq’s oil minister Hayan Abdel Ghani said in July that after parliament approved an increase in subsidies for oil production in the northern region this year, the KRG must hand over produced oil to the federal government for export, adding that the budget set that quantity at 400,000 bpd.
(Writing by Nadim Kawach; Editing by Anoop Menon)
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