Turkey is proposing the construction of four oil refineries in North Iraq to compensate for heavy losses stemming from the halt of the Kirkuk–Ceyhan pipeline, according to a news report. 

The draft oil agreement also links oil and economic cooperation to the release of Iraq's water quota from Turkey, alongside calls to expand bilateral trade and raise crude exports through Ceyhan. 

“Turkey has sent Iraq a draft for a new oil agreement that includes the construction of four oil refineries in North Iraq with limited Turkish participation," said a Shafaq News Agency report.

It stated that the two countries would exchange visits in the coming weeks for talks on the proposed projects and the renewal of the 52-year-old pipeline pact, which Turkey decided in July to terminate within a year. 

Iraqi analysts believe the decision was because Ankara wants to negotiate a better financial agreement. 

Crude flows via the Kirkuk-Ceyhan pipeline were suspended in March 2023 after an international arbitration court ordered Turkey to pay Iraq $1.5 billion in damages for unauthorised Kurdish exports between 2014 and 2018.

(Writing by N Saaed; Editing by Sona Nambiar)

(anoop.menon@lseg.com)

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