ECONOMY
A picture dated April 2, 2023 shows a view of the North Oil Company installations in the northern Iraqi multi-ethnic province of Kirkuk. Photo: Marwan Ibrahim/Rudaw
ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) said on Thursday that an agreement with the Iraqi federal government has been finalized to resume oil exports through Turkey, a day after a request was submitted to Ankara to allow oil flow.
Turkey closed a key pipeline pumping oil from the Kurdistan Region to its port of Ceyhan in the Mediterranean on March 25 after a ruling by the International Chamber of Commerce (ICC).
Baghdad and Erbil signed an agreement on April 14 to resume oil exports to Ankara, but this has not been the case yet. Certain aspects of the deal are still expected to be resolved, while Turkey, currently busy with upcoming elections, is yet to agree to the terms.
The Kurdistan Region’s Ministry of Natural Resources on Wednesday said that Iraq’s State Oil Marketing Organization (SOMO) had sent an official request to Turkey to resume exports through the pipeline, according to the latest statement from the KRG regarding the issue.
It added that the Kurdish ministry and Iraq’s Ministry of Oil “are reportedly waiting for Turkey’s response before resuming oil exports.”
On Thursday evening, Iraq's Minister of Oil Hayyan Abdul Ghani said in a statement that Baghdad has asked Turkey to allow the resumption of oil exports through Ceyhan port starting from Saturday.
Oil firms operating in the Kurdistan Region have stopped production or reduced output and diverted it into storage after the ruling.
The halt in oil exports has jeopardized the production of around 450,000 barrels of oil per day as IOCs are storing produce. The suspension of oil exports to the port of Ceyhan also contributed to a 5.7 percent rise in global oil prices.
The Paris-based arbitration court ruled that Ankara had breached a 1973 pipeline agreement between Iraq and Turkey that obliges the Turkish government to abide by instructions issued by Iraq regarding the transport of crude oil exported from Iraq.
Ankara has been ordered to pay around $1.5 billion in damages. However, Baghdad must also pay over $527 million to Turkey in reimbursement claims related to equipment and personnel as stipulated by the court ruling.
Updated at 10:47pm
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