Iraq approached the agreement to restart the export of pipe oil from Kurdistan to Türkiye, said the source
Iraq, the second largest producer of OPEC, has given preliminary approval to continue the export of pipe oil from the Kurdistan semi-autonomy region through Turkey after the delay for the expected restart, the source who is familiar with the conversation told Reuters.
The agreement between the Iraqi Federal Government, the Kurdistan regional government and international oil companies can add at least 230,000 barrels per day of new supply when OPEC producers increase output to regain market share.
Iraq exports are around 3.4 million barrels of oil per day from its southern port, but the Kirkuk-Ceyhan pipeline in the north has been closed since March 2023 after the Arbitration Court decided that Turkey had to pay a compensation of $ 1.5 billion for invalid exports between 2014 and 2018. Türkiye filed an appeal to the decision.
Ankara has since said to be willing to restart exports, but the flow remains suspended because of the ongoing legal and political disputes between Baghdad, the Kurdistan regional government in Erbil, and international oil companies.
The Iraqi Cabinet has given preliminary approval for plans to continue exports, and international oil companies operating in Kurdistan have also agreed temporarily, two sources who are familiar with the conversation said.
Apikur, a group representing the company including Genel Energy, Dno and Gulf Keystone, refused to comment, quoting ongoing negotiations.
“The discussion has increased and we are closer to the Tripartite agreement … than we have done, because everything shows flexibility,” said an executive of one of the international oil companies.
Under the preliminary plan, KRG will be committed to giving at least 230,000 BPD to Iraqi Somo State Oil Marketers, while maintaining an additional 50,000 BPD for local use.
An independent trader will handle sales from Ceyhan using Somo’s official price.
For each barrel sold, $ 16 will be transferred to the Escrow account and distributed proportionally to the manufacturer. The remaining income will go to Somo.
The plan of the plan also does not determine how or when the producer will receive around $ 1 billion in unpaid arrears, accumulated between September 2022 and March 2023.
Luke Clements, CFO of Genel Energy, said at a conference in Oslo last week that there was significant progress made in the preparation of the agreement to restart the pipe export.
“But it still needs to cross the limit,” he added.
Source: Reuters
