Baghdad is repairing a pipeline that could allow it to send 350,000 barrels per day to Turkey by the end of the month, Reuters reported, citing an Iraqi deputy oil minister on Monday, a step likely to rile foreign oil companies and the Kurdistan Regional Government (KRG).
The reopening of the Kirkuk-Ceyhan pipeline, which has been shut for a decade, would provide a rival route to a pipeline from the Kurdistan region that has been shut for a year as talks between Baghdad and the KRG on resuming exports have stalled.
Baghdad deems production-sharing agreements between the Kurds and foreign companies using the KRG’s pipeline illegal.
The federal government in Baghdad will require oil companies to negotiate with it to sell their oil via the revived pipeline to Turkey, potentially angering the Kurds, who rely on almost entirely on oil revenue.
Exports via the 960 km (600 mile) pipeline were halted in 2014 after repeated attacks by Islamic State in Iraq and the Levant (ISIL) militants. It once handled about 0.5 percent of global supply.
“Repair is ongoing, and a major crude pumping station with storage facilities has been completed. The pipeline is likely to be operational and ready to restart flows by the end of this month,” Basim Mohammed, Iraqi deputy oil minister for upstream affairs, told Reuters.
Repairing damaged sections inside Iraq and completing one essential pumping station will be the first stage of operations to bring the pipeline back to full capacity, he said.
The KRG’s pipeline was halted on March 25, 2023 after an arbitration court ruled it violated provisions of a 1973 treaty by facilitating oil exports from the semi-autonomous Kurdish region without Baghdad’s consent.
Negotiations to restart it have faltered as Turkey, the KRG and the federal government have made conflicting demands.
Two Iraqi oil officials and a government energy adviser, speaking on condition of anonymity, said Baghdad had balked at a Kurdish demand that the federal government pay a $6 per barrel transit fee to Russian oil firm Rosneft, which partly owns the pipeline.