VIENNA, Austria – The Iranian oil minister told Rudaw on Thursday that Iran and Iraq will sign a contract to send up to 60,000 bpd of oil by truck from Kirkuk oil fields to Iran, and that it is likely they will sign a contract to give related companies the mandate to assess an oil pipeline from Kirkuk to Iran.
Bijan Zangeneh, who attended a meeting of the Organization for Petroleum Exporting Countries (OPEC) in Vienna on Thursday, said that their discussion with the Iraqi government does not include the Kurdistan Region.
Zangeneh said they made “good contracts” with Iraq’s marketing oil company (SOMO) regarding Kirkuk oil and that the first stage is to truck oil to Iran starting from 15,000 bpd. This will then be increased to 60,000 bpd.
He said, however, the “most important decision is to establish a pipeline from Kirkuk to Iran.”
The Iranian oil ministry is to have a meeting with SOMO in Iran next week to sign the oil-truck contract, and then discuss the consultations regarding the oil pipeline that may enter Iran through Qasr-e-Shirin, about 230 km southeast of Kirkuk.
Iraq’s oil minister Jabbar al-Luaibi, who had announced an initial agreement with Iran earlier this month to truck Kirkuk oil to Iran’s Kermanshah, told Rudaw at the meeting today that Iraq has “many options” to export oil from Kirkuk, including repairing the Iraqi pipeline to Turkey that will take a year to complete.
He said his country also has a contract with Iran to truck about 60,000 bpd and that 190,000 bpd is also transferred from Kirkuk to Iraqi refineries.
The Kurdish Prime Minister Nechirvan Barzani on Monday accused the Iraqi government of failing to benefit from the Kirkuk oil since it has halted exports and does not allow the KRG to export Kirkuk oil either.
Luaibi, the Iraqi minister said they “are ready for dialogue," with the KRG regarding the oil export, "but so far they have not approached us for dialogue.”
Kirkuk oil fields were under the KRG control from late 2014 until mid-October when the Iraqi forces took control of the oil-rich province as part of their military incursion against the Kurdish Peshmerga following the Kurdish vote on independence in September.
OPEC also announced today that they will extend the current cut on oil production until the end of 2018 to help balance the supply with demand in the market. The organization has yet to convince the non-OPEC member Russia to agree to the extension.
Luaibi said that Iraq “will not deviate even an inch from the OPEC declaration,” that requires Iraq to cut its production by at least 210,000 bpd.
The current agreement which requires OPEC members to cut oil production by 1.2 million bpd will expire in March.
OPEC has signaled that the extension deal may be reviewed in June next year.
