19,000 barrels at heart of Iraq-Kurd oil export rift

Zawya

5 days ago

Iraq and the Kurdistan Regional Government (KRG) have failed to reach agreement on the resumption of oil exports through Turkey because of a rift over 19,000 barrels per day (bpd), Iraq's oil minister has revealed.
Hayan Abdel Ghani told the official Iraqi News Agency at the weekend that the two sides have agreed on most issues for the resumption of crude exports via the 970-kilometre Kirkuk-Ceyhan pipeline except the one related to Kurdistan's oil consumption.
He said budget auditors in both Baghdad and Erbil have set Kurdistan's share of domestic demand at 46,000 bpd but KRG insists on 65,000 bpd, which will reduce crude exports by around 19,000 bpd.
'Some issues have obstructed the agreement reached between the two sides for the resumption of oil exports via Turkey...the main obstacle is that financial auditors from the two sides have set Kurdistan's share of refined oil (domestic consumption) at 46,000 bpd but KRG insists on 65,000 bpd,' Abdel Ghani said.
He noted that after Parliament approved an increase in subsidy for oil production in the Northern region this year, KRG must hand over produced oil to the federal government for export, adding that the budget set that quantity at 400,000 bpd.
In June, Baghdad accused KRG of smuggling out oil supplies and inflicting heavy losses on the country's coffers, adding that KRG has failed to deliver produced crude or oil export revenues to the federal government in Baghdad.
Iraq, OPEC's second largest oil producer, has been locked in a dispute with KRG over crude exports despite Kurdistan's support for an initial agreement to subsidise production and transport of Kurdistan's oil at a rate of $16 a barrel.
In February, Iraq's parliament approved a budget amendment to subsidise production costs for international oil companies operating in KRG in a move aimed at unblocking northern oil exports.
The amendment sets the rate at $16 a barrel, up from an earlier proposal for $7.9 for transport and production costs, which was rejected as too low by KRG.
'Who can believe that the rift between Baghdad and Erbil now is only about 19,000 barrels of oil…I don't think this is a real problem…it can be easily resolved by splitting that amount between the two sides,' said Nabil Al-Marsoumi, an economics professor at Basra University in South Iraq.
Oil flows through the KRG's pipeline were halted by Turkey in March 2023 after the International Chamber of Commerce (ICC) ordered Ankara to pay Baghdad damages of $1.5 billion for unauthorised exports by the KRG between 2014 and 2018.
In May, Iraq deepened the rift when it declared its rejection of two major oil and gas contracts announced by KRG, branding them invalid under federal law.
The disputed agreements involve the development of the Miran and Topkhana-Kurdamir fields in Sulaymaniyah Governorate, Iraq's media reported, adding that Baghdad insists they cannot proceed without central government approval. Reports said earlier the Iraqi Oil Ministry decided to sue KRG over the deals.
(Reporting by Nadim Kawach; Editing by Anoop Menon)
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