Baghdad-Erbil oil deal significant, says Iraq spokesman

ERBIL, Kurdistan Region – An oil agreement between Baghdad and Erbil "will have a significant role in solving parts of the financial problems" between the two sides, Iraq’s government spokesman told Rudaw.

Saad Hadisi told Rudaw on Monday that both Iraq and the Kurdistan Regional Government (KRG) had faced "great economic challenges" which called for "joint actions.”

Earlier Monday, a top Kurdish delegation headed by KRG Prime Minister Nechirvan Barzani visited Baghdad, where he met with Iraq's Prime Minister Haidar Abadi regarding oil export and the anticipated Mosul operation.

"The visit was a great beginning and is an important step towards solving most of the financial problems between Erbil and Baghdad," Hadisi said.

"This new step will become a starting point to implement the new deal and abide by it," he told Rudaw.

The new agreement is of particular importance for the production and export of oil in Kirkuk, currently administrated jointly by the KRG and Iraq's own North Oil Company (NOC).

According to the new understanding, production from a third oil well in Kirkuk -- known as Baba Gurgur -- will be exported through Kurdistan’s pipeline to the Turkish Ceyhan port, along with the crude produced in the other two oil fields in the province, Havana and Bay Hasan.

KRG media spokesperson Sami Argoshi told Rudaw the new agreement only involves the production and export of oil from Kirkuk and will not change the export from the Kurdistan Region. 

The export of crude oil from Kirkuk rose last week after a ban was lifted on several oil fields in the province, increasing the total export of the crude to nearly 300,000 barrels per day (bpd) from previous 150,000 bpd.

The decision was made after Iraq's new Oil Minister Jabar Luaibi was appointed in August and replaced Shiite veteran politician Adil Abdul Mahdi, who resigned after disagreements with the Iraqi PM.

The NOC halted the export from Kirkuk's three oil wells including Baba Gurgur, Khabaza and Jambouri on March 11, with an output of 150,000.

The export from Kirkuk's Bay Hasan and Havana through Kurdistan pipelines were not part of the ban.

Under the terms of a 2014 agreement between Erbil and Baghdad, NOC will export only parts of its oil through Kurdish pipelines to the Turkish Ceyhan port in return for KRG administering portions of the oil production in the province.

But if Monday's deal is implemented, almost all the produced oil in Kirkuk will be exported via Kurdistan’s pipeline.