Authors: Ahmed Rashid and Yomna Ehab
BAGHDAD, March 17 (Reuters) – The Iraqi government and the Kurdistan Regional Government have reached an agreement to resume oil exports to Turkey’s Ceyhan energy center starting from Wednesday, Iraq’s oil minister said on Tuesday.
Oil deliveries from the port of Ceyhan are expected to start at 10am local time (0700GMT) on Wednesday, state media quoted Iraqi Oil Minister Hayan Abdel-Ghani as saying.
The KRG confirmed the agreement and said in a statement that the two sides would set up a joint committee to prepare to resume oil exports through pipelines in the region from Wednesday and return revenues to the federal treasury.
The parties also agreed to take necessary safety measures to protect the fields and ensure the continuity of export operations, the KRG said.
Masroor Barzani, the prime minister of the Kurdish Autonomous Region, said in a post on
He added: “Discussions with Baghdad will continue to urgently lift import and trade restrictions in the region and provide oil and gas companies with the necessary assurances that they can resume production in a safe environment.”
Barzani later stated on
Iraqi Kurdish authorities said on Sunday that Baghdad had failed to address security and economic challenges facing the oil industry and denied accusations that they were refusing to export crude through regional pipelines.
Earlier, Iraq’s oil ministry said the Kurdish regional government refused to allow it to use a pipeline as an alternative route to crude flows disrupted by the conflict with Iran, accusing local authorities of setting arbitrary conditions.
Iran conflict leads to sharp decline in production
Earlier on Tuesday, Iraq’s president urged the Iraqi federal government and the Kurdish regional government to cooperate in resuming crude oil exports, a presidential statement said.
The Iraqi parliament also issued a seven-point decision on Wednesday at a meeting dedicated to oil exports from the Ceyhan Pipeline, calling on the federal government to find exports for Iraqi crude to avoid economic losses amid the current security situation, the state news agency reported.
The parliamentary decision appeared aimed at strengthening Baghdad’s authority over the country’s oil sector, with a meeting late on Tuesday with Iraq’s oil minister to assess the impact of a halt in oil exports following the closure of the Strait of Hormuz.
In a statement, parliament said it was ready to approve any measures needed to support the effort and called on the federal government to impose controls on all sources of oil production, transportation and distribution.
It also urged the government to supply fuel to state-run and private plants to prevent refinery inventories from building up, and to restore the Iraqi pipeline route from Kirkuk to Ceyhan via western Mosul, Zumar and Fish Habour.
On March 8, sources told Reuters that oil production in Iraq’s main southern fields, where most of Iraq’s crude is produced and exported, has plummeted by 70% to 1.3 million barrels per day, as the Iran conflict effectively closed the vital Strait of Hormuz, through which about 20% of the world’s oil passes.
Two oil officials told Reuters last week that Iraq’s oil ministry wrote to the Kurdish regional government in early March seeking permission to transport at least 100,000 barrels per day of crude oil from Kirkuk’s oil fields to Turkey’s Ceyhan energy hub through the Kurdistan pipeline network.
Kurdish officials say tensions with Baghdad have increased after the federal government adopted a new electronic customs system to monitor imports and revenue, a move the autonomous Kurdish region sees as undermining its autonomy and control of trade.
(Reporting by Ahmed Rashid in Baghdad and Yomna Elhab and Mohammed Al Jabali in Cairo; Additional reporting by Enas Arashray in Cairo; Writing by Yomna Elhab; Editing by Alistair Bell, Rod Nickell and Bill Burkert)