By Muhammad Hadi
ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) has officially begun exporting oil from Kirkuk’s vast oil wells, and a member of the Kurdish parliament says the action is in line with the Iraqi charter and has been carried out with the prior knowledge of the Iraqi government.
“The KRG is entitled to 17 per cent of oil revenues in the so-called disputed areas outside the Kurdistan Region and since Kirkuk’s oil fields are connected to Kurdistan’s pipelines, it is appropriate for the KRG to export the oil,” Dilshad Shaaban, head of the Natural Resources Committee in the Kurdish parliament told Rudaw.
The KRG exports 150,000 barrels per day (bpd) to the Turkish Ceyhan port through Iraq’s state-owned oil company, SOMO, which will then transfer the revenues directly to the Iraqi central bank in Baghdad.
Initially, Kurdistan will receive an installment of $1 billion, but it could eventually lead to a restoration of KRG’s monthly budget which has been withheld by Baghdad since February.
“There could be an agreement between Turkey, Iraq and the KRG to export the oil from northern Iraq, including Mosul, Kirkuk and the Kurdistan Region through Kurdistan’s pipeline to Ceyhan in west Turkey. The KRG will then give the Iraqi government 150,000 bpd from Kirkuk oil wells and in return Bagdad will resume Kurdistan’s budget,” predicts Shaaban, who says Iraq is” in desperate need” of increasing its oil production, which has been affected by events in Mosul and Kirkuk.
Rudaw has learned that the Turkish Toprasi company -- which was earlier blacklisted by Baghdad -- will purchase the exported oil through SOMO.
The deal follows a visit by Turkish Prime Minister Ahmet Davutoglu to Baghdad and Erbil.
“I do not think the KRG will give more oil to the Iraqi government than that,” says Dr. Karwan Ismael, who has specialized in Iraqi-Kurdish oil agreements since 2004.
“KRG Prime Minister Nechirvan Barzani has made it clear that he does not wish to go back to the old centralized system regarding the oil export,” Ismael said.
According to official estimates, the oil fields of Zumar and Ain Zala in Mosul province will in the near future be connected to Kurdistan’s pipeline, as 80 per cent of the project is completed, according to official KRG sources.
“At the moment both the KRG Ministry of Natural Resources and the Iraqi Northern Oil Company jointly administer the export of oil from Kirkuk,” says Shaaban.
Bewar Xinsi, a national security advisor on oil issues to KRG, says Zumar and Ain Zala have roughly 7 billion barrels in oil reserves.
“If Kirkuk’s 12-15 billion barrels of reserve and that of Zumar and Ain Zala are added to the KRG total assets, then Kurdistan will have approximately 65 billion barrels of reserves, which will give Kurdistan a strong position in the region,” Xinsi told Rudaw.
Officials in Kirkuk’s provincial council say they have no objection to the deal and welcome a KRG-administrated export of their oil.
“We have not been able to export any of our oil since February,” says Fuad Hussein, a member of the Kirkuk provincial council. “We have no other option than relying on Kurdistan’s oil pipeline.”
