ERBIL, Kurdistan Region - The Iraqi government is planning to sell crude from oilfields in Kirkuk via Iran, in case oil and budget talks with the Kurdistan Regional Government (KRG) fail.
“Iraq’s state oil marketing organization (SOMO) plans to hold talks with the Kurdish regional government, possibly next week, about Iraqi oil exported through Turkey,“ Iraq’s deputy oil minister Fayadh al-Nema told Reuters on Friday
“If the negotiations come to a close without an agreement we will start to find a way in order to sell our oil because we need money, either to Iran or other countries.” he added
Iraq is the second-largest producer in OPEC, and 95 percent of the Iraqi budget relies on oil revenues. But drops in oil prices and the war with Islamic State (ISIS) has plunged the Iraqi government into a severe financial crisis.
The KRG exports nearly 500,000 barrels per day (bpd) of its oil through a pipeline to Turkey. But Baghdad has no authority over the 150,000 bpd from Kirkuk that has been exported via the KRG pipeline.
The KRG ministry of Natural Resources (MNR) has been in talks with Iran since early this year over oil agreements. There have been talks with Tehran over building a pipeline to Iran, but there has been no firm agreement.
“The Iranian government stepped forward to sign the oil agreement with the KRG and for that they have been waiting for three months. But the KRG has remained silent,” Nazim Dabagh, the KRG representative in Iran, told Rudaw earlier this month.
The Kurdistan Region has an estimated 45 billion barrels of crude oil reserves, which it administers largely independently from Baghdad.
The deal with Tehran would give the KRG access to Iran’s Persian Gulf to ship its crude oil to international markets. Iran made the offer of a pipeline to Kurdish officials after a series of disruptions halted the shipment of Kurdish oil to Turkey’s Ceyhan port on the Mediterranean coast.
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