Basem Muhammad, Undersecretary of the Iraqi Ministry of Oil for Extraction Affairs, said on Monday that Baghdad is working to rehabilitate a pipeline that will allow it to pump 350,000 barrels per day of oil to Turkey by the end of the month, in a move that is likely to anger foreign oil companies and the Kurdistan Regional Government.
Restarting the Kirkuk-Ceyhan pipeline, which has been closed for a decade, would provide a competing route for a pipeline from the Kurdistan region that has been stalled for a year amid faltering talks between Baghdad and the regional government regarding resuming exports.
Baghdad considers production-sharing agreements between the Kurds and foreign companies using the KRG pipeline illegal.
The federal government in Baghdad will ask oil companies to negotiate with it to sell their oil through the revived pipeline to Turkey, which could anger the Kurds, who depend almost entirely on oil revenues.
Exports through the 960-kilometre pipeline stopped in 2014 after repeated attacks by ISIS militants. In the past, about 0.5 percent of global supplies were pumped through it.
Basem Mohammed, Undersecretary of the Ministry of Oil for Extraction Affairs, told Reuters, “Rehabilitation work is continuing, and we have rehabilitated and completed the oil pumping station.” The pipeline will likely be ready for operation and re-pumping at the end of this month.
He added that repairing the damaged parts inside Iraq and completing the establishment of a basic pumping station will be the first stage of operations to restore the pipeline to its full capacity.
The KRG pipeline was stopped on March 25, 2023, after an arbitration court ruled that it violated the terms of a 1973 treaty by facilitating oil exports from the semi-autonomous Kurdish region without Baghdad’s approval.
Negotiations to restart it faltered after Türkiye, the Kurdistan Regional Government, and the federal government presented conflicting demands.
Two Iraqi oil sector officials and a government energy advisor, who requested to remain anonymous, said that Baghdad rejected a Kurdish request that the federal government pay a transit fee of six dollars per barrel to the Russian oil company Rosneft, which owns a share of the pipeline.
Bahjat Ahmed, an oil expert in the Kurdistan region who is familiar with the details of the talks, said that Oil Ministry officials informed the Kurdish negotiating delegation that they consider the agreement between the Kurdistan Regional Government and Rosneft to be illegal and in violation of Iraqi laws.
The Kurdistan Regional Government’s exports flow through its pipeline to Fish Khabur on the northern border of Iraq, where the oil enters Turkey and is pumped to the port of Ceyhan on the Mediterranean coast.
Three sources from the state-run North Oil Company said that experimental pumping of crude oil began early last week to examine the part that passes inside Iraqi territory and showed leakage in some parts.
The technical crews of the North Oil Company accelerated the repair operations of the damaged parts that extend from Kirkuk through Salah al-Din and Mosul to the border area with Turkey.
The two Iraqi oil officials and the government energy advisor said that the agreement between Baghdad and Ankara regarding the operations of the Iraq-Turkey oil pipeline was extended in 2010 for a period of 15 years and will expire in mid-2025.
The government energy advisor said that resuming operations on the old pipeline would be discussed as part of talks to extend the line agreement.
