Crude oil exports from Iraq’s semi-autonomous region of Kurdistan have reached 205,000 barrels per day (bpd), but the oil flows via a pipeline to the Turkish point of Ceyhan could be under threat again.
Oil exports from Iraq’s northern region of Kurdistan via the Iraq-Türkiye Pipeline to Ceyhan resumed on September 27, after two and a half years of halt over disagreements between the federal Iraqi government and the Kurdistan Regional Government (KRG) over how export revenues should be distributed.
Crude from Kurdistan is now steadily flowing at a rate of about 205,000 bpd, according to details on output and exports obtained by the Kurdistan24 news outlet.
Yet, the fragile three-party agreement signed by the federal Iraqi government, the KRG, and most of the foreign firm operating in Kurdistan could unravel, the Kurdish website reports.
The federal government in Baghdad has reportedly failed to adhere to the agreement—it has failed to pay to the international oil companies their contractually obligated financial dues to cover operational costs and investment returns, according to Kurdistan24.
Eight foreign companies operating in Kurdistan have signed agreements with the KRG and the Federal Government of Iraq to enable the restart of international crude exports from the region.
This agreement paved to way to the restart of exports, which were halted for two and a half years, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports.
The federal government in Baghdad and the regional Kurdish government in Erbil squabbled for more than two years over who should be responsible for the oil exports and the subsequent revenue distribution.
Under the agreement to restart oil exports, hailed as historic by Iraq’s federal government, KRG began delivering at the end of September about 190,000 bpd of crude to Iraqi state marketing company SOMO. Kurdistan is also entitled to keep 50,000 bpd to use for local consumption.
By Charles Kennedy for Oilprice.com
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