ERBIL, Kurdistan Region – The landlocked Kurdistan Region could open a second oil export route through Iran and into the Persian Gulf, if talks due this month in Erbil with an Iranian delegation shift into high gear. Both Tehran and the Kurdistan Regional Government (KRG) – whose exports currently are routed through a pipeline from the oil city of Kirkuk to the Mediterranean port of Ceyhan in Turkey – are keen on moving forward with Kurdish oil going to Iran. “Over the past two years, there have been talks on how to export oil to Iran,” Abdulla Akreyi, who is in charge of Iranian affairs at the KRG’s Foreign Relations Department, told Rudaw English. “The Iranians have frequently told us that they are ready to import Kurdish crude and process it at the refineries in Kermanshah or Tabriz,” he said. “In return, they are ready to export gas to Kurdistan,” he explained. “We have also discussed constructing pipelines, but these are only under discussion,” he said, adding that the idea is to export Kurdish oil through Iran’s oil terminals on the Persian Gulf. Akreyi and the Iranian Consul General in Sulaimani, Saadullah Masoudi, confirmed to Rudaw English that a senior oil delegation from Tehran will arrive in Kurdistan sometime this month, for discussions on how to begin with oil exports. Masoudi, the Iranian consul in Sulaimani, told Rudaw in an interview that Iran’s offer to take in Kurdish oil was made last October, during a visit to Tehran by Kurdish Prime Minister Nechirvan Barzani. “In several meetings we have proposed to Kurdistan Region officials to export their oil via pipelines through Iranian soil and to the Gulf,” Masoudi said. “Iran’s larger companies have the ability to implement such a project and it only depends on the determination of the two sides,” he added. Akreyi acknowledged that, “exporting oil to Iran is very crucial to us. It’s very important to export oil to international markets rather than having only one route.” The KRG had largely distanced itself from its powerful Shiite neighbor to the east, which gained unprecedented influence in postwar Iraq. But now, critics say that KRG must find a second route to export its crude oil and natural gas. Having only one export route has meant that, whenever the Ceyhan pipeline is shut, the KRG loses money. Over the past several months, at least three major incidents have temporarily disrupted export of Kurdish oil through the newly constructed pipelines to Ceyhan, after Erbil started to sell its 650,000 barrels per day oil (bpd) independent of Baghdad in July 2015. The last disruption was in March. The stoppage, for reasons that reportedly include sabotage by Turkey’s outlawed Kurdistan Workers’ Party (PKK) has cost Erbil tens of millions of desperately needed dollars, at a time when it is facing a severe financial crunch and fighting a war with the Islamic State (ISIS). Nazim Dabagh, the KRG’s representative in Tehran, has said that Iran has offered cash loans to cash-strapped Erbil in return for stakes in Kurdish oil. But there is a large fly in the ointment: Iraq’s central government. Baghdad has opposed independent oil sales by Kurdistan, insisting that all crude sales be carried out by its own State Oil Marketing Company (SOMO). The exports to Ceyhan have been rife with problems created by Baghdad. “I don’t think Iran will go ahead with an oil deal with the KRG without Baghdad’s approval,” said Ibrahim Mohamed Bahr al-Uloom, a former Iraqi oil minister who is currently a member of the Iraqi parliament’s Oil and Gas Committee. But he noted that the clerical government in Tehran carries a lot of clout with the Shiite government in Baghdad. “I expect Iran will take care of the relations between the KRG and Baghdad,” the former oil minister said. “The Iranians will presumably work out all the details of an oil deal with Baghdad, so that things go right,” he added. Sherko Jewdet, an MP in the Kurdistan parliament and a member of its energy committee, said he believed that – if Tehran and Erbil are both keen on an oil deal -- Baghdad is unlikely to succeed in blocking it. “I believe that both Iran and the KRG are willing to negotiate together, and they are closer than ever. But things depend on whether this can be translated into a real partnership that is beneficial to both sides. “If that happens, I don’t believe that Baghdad will be able to take a hard stand against the deal, just as it failed to do on the agreement between the KRG and Turkey. Any oil agreement between Tehran and Erbil will not only raise eyebrows in Baghdad; the United States also remains opposed to any deals that raise the profile of Iran, its arch regional enemy. The Kurdistan region has an estimated 45 billion barrels of oil reserves, which it administers largely independently of Baghdad. Apart from a 50-year-long oil deal with Ankara, Erbil will from 2017 be a major exporter of natural gas to Turkey.
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