“The exportation of Kirkuk oil through the Kurdistan [Region] pipeline will be a strong point for Kurdish MPs and those Kurdistan Region delegations who visit Baghdad for discussions over the budget,” Jamal Kochar, a Kurdistan Islamic Union (KIU) member of the Iraqi parliament, told Rudaw on Saturday.
He also said Kurds can use this as a bargaining chip to “ensure a Kurdish share in 2019 draft budget bill because a portion of Iraqi income will be under the control of the Kurdistan Region.”
Kochar, who is a member of the parliament’s finance committee, said this development can benefit the KRG politically, and indicates a shift in the US position on the Region.
The US was exerting pressure on both Erbil and Baghdad to reach an agreement and has given Iraq until the end of December to end its energy dependence on Iran.
Iraq’s 2019 draft budget bill is proving highly unpopular among Kurds and Sunnis in the Baghdad parliament. Sunnis are asking for a bigger share from the federal treasury to support the reconstruction of Sunni-majority areas devastated in the war with ISIS.
Kurds meanwhile want their share of the budget restored to its pre-2014 level of 17 percent. In a dispute over independent oil sales, former Iraqi PM Nouri al-Maliki cut the KRG’s share of the budget to zero. His successor Haider al-Abadi restored payments to the KRG this year – but at 12.5 percent.
Iraq’s newly appointed PM, Adil Abdul-Mahdi, has said the draft budget bill and its shortcomings belong to the previous administration. Talks are ongoing to address the imbalances and alleged constitutional violations.
Between 50,000 and 100,000 barrels per day (bpd) are expected to be exported under the new agreement reached on Friday, which stipulates the resumption of Kirkuk oil exports to the Turkish port of Ceyhan via the Kurdistan Region, overseen by Iraq’s State Organization for Marketing of Oil (SOMO).
Since taking over Kirkuk’s oil fields in October 2017, Iraq had been exporting crude across the Iranian border. As a result of US sanctions on Iran, Baghdad has ceased using this route.
Now it will use the Kirkuk-Ceyhan pipeline, which is partially owned and controlled by the KRG.
Pumping Iraqi oil through this pipeline could add as much as 400,000 barrels per day (bpd) into the world market – 300,000 from Kirkuk and possibly 100,000 that Iraq is currently pulling out of the ground in Nineveh province.
The Ministry of Natural Resources (MNR) announced last week it had boosted capacity in the export pipeline, bringing it up to one million bpd and saying the extra capacity could be used by Baghdad “to export the currently stranded oil in Kirkuk and surrounding areas.”
Relations between Erbil and Baghdad have been gradually improving. The two sides struck a deal earlier this week to scrap customs checkpoints on major roads between the Kurdistan Region and Iraq.
