Iraq's KRG uses Iraqi pipeline as 'goodwill gesture'

Friday, March 21, 2014

Prime Minister of Iraq's KRG says they will begin exporting oil via Turkey-Iraq pipeline as 'goodwill gesture'.

Prime Minister of Iraq's KRG says they will begin exporting oil via Turkey-Iraq pipeline as 'goodwill gesture'.

IRBIL - The Kurdish Regional Government (KRG) in northern Iraq announced it will export 100,000 barrels of oil per day through the existing Turkey-Iraq pipeline from April 1 as a "gesture of goodwill" while negotiations with Baghdad continue, a statement from the region's prime minister said on Thursday.

Iraqi Prime Minister Nouri al-Maliki’s administration has been stressing over the years that the Iraqi constitution grants no rights to KRG to export oil from the region without an agreement with the central government. Baghdad refused to acknowledge any oil drilling contracts between KRG and foreign oil companies.

The KRG, on the other hand, continues to claim that the status of its autonomy since the fall of Saddam Hussein’s regime and Iraq’s constitution give it the right to make export deals without the central government’s approval.

In the coming weeks, the KRG will seek a full settlement with Baghdad on the way in which the KRG’s oil exports and oil sales revenues are managed and controlled, according to a statment from Iraqi Kurdistan President Masoud Barzani. 

"The negotiations with Baghdad on oil export and budgetary matters are ongoing. These negotiations have not yet resulted in any acceptable agreements." 

"As a goodwill gesture, the Kurdistan Regional Government has offered to make a contribution to Iraqi oil pipeline exports to give the negotiations the maximum chance of success," the statement added.

In November 2013, Turkish and KRG officials signed an agreement that would enable the flow of Kurdish oil from Kurdistan region's largest oil producing field Taq Taq field in northern Iraq to the port of Ceyhan on Turkey's south-eastern Mediterranean coast.

The agreement allowed Iraqi Kurdish oil to be stored and exported at times when no oil is being pumped by the Iraq's central administration.

Baghdad, however, says the agreement violates Iraq's constitution because the oil would not be exported by Iraq's national oil company. The KRG did not withdraw its demands, saying that it could never get its 17 percent share from the Iraqi budget. 

Currently almost 1.5 million barrels of oil are stored in Ceyhan, which has a total of storage capacity of 2.5 million, while awaiting Baghdad's approval to be exported, the Turkish Energy and Natural Resources Minister said on March 15.

Irbil and Baghdad have carried out a series of meetings to reach an agreement on the issue but have not yet found a solution. The Iraq constitution states that the country's oil and gas is owned by “the people of Iraq in all regions and governorates.”

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