Iraq And Kurdistan Close To Deal On Oil Exports
Baghdad and Erbil are set to reach an agreement over crude oil exports from Iraq’s semi-autonomous Kurdistan region within the next two weeks, Iraq’s oil minister said on Wednesday.
“All indicators are positive,” Iraq’s oil minister, Hayyan Abdul Ghani, said this week. “Regarding the agreement with the Region, we have reached the final stage and hopefully we will reach the final agreement on the exportation of crude oil within a maximum of two weeks,” he said, adding that all points have been agreed on except how Iraq will deal with the bank account where Erbil’s oil money is kept.
Iraq’s Prime Minister, Mohamed Shia al-Sudani, said weeks ago that Iraq would restart the export of crude oil from the Kurdistan region within days after the deputy speaker of the Iraqi parliament said that Erbil and Baghdad had ironed own most of their differences with regard to Kurdistan region’s oil exports and that all that was needed was to hammer out some details.
Today or tomorrow, we will go to sign the agreements with SOMO and the oil companies to resume exports,” PM Al-Sudani told Rudaw in mid-April. But the oil has not resumed flowing.
Kurdistan’s crude oil exports – around 400,000 to 450,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets – were halted in late March by the federal government of Iraq.
A few days earlier, the International Chamber of Commerce ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq argued that Turkey shouldn’t allow Kurdish oil exports via the Iraq-Turkey pipeline and Ceyhan without approval from the federal government of Iraq.
The court ruled that Turkey should pay Iraq compensation of $1.5 billion for what now appears to be illegal exports of oil over five years. Turkey then shut off the Kirkuk-Ceyhan pipeline in response, which suspended the flow of oil from the Kurdistan region. Kurdistan’s oilfields also shut down due to a lack of storage.
The negotiations between Baghdad and Erbil are focused on who gets more control over the oil flows, with both sides being forced to make concessions so exports can resume.
By Julianne Geiger for Oilprice.com
TotalEnergies To Launch $27 Billion Energy Project In Iraq This Month
French oil and gas multinational TotalEnergies (NYSE:TTE) has finally reached an agreement with the government of Iraq to start a long-delayed $27 billion energy project in two weeks, Iraq's oil minister Hayan Abdel-Ghani said on Wednesday.
The two parties first struck the deal back in 2021 that would see Total build four oil, gas, and renewables projects in southern Iraq over 25 years with an initial investment of $10 billion. Unfortunately, the giant project was shelved amid disputes and squabbling between Iraqi politicians over the terms of the deal.
However, last month Iraq agreed to a smaller 30% stake in the project, setting in motion a deal that could lure foreign investment back into the country. After years of instability, Iraq has been enjoying a period of relative stability, increasing the chances of foreign investors returning to the country.
"The government of Iraq confirmed the whole contract, no modification at all ... so that was for me more than good news," Total Chief Executive Patrick Pouyanne has told Reuters.
Last year, widespread fighting broke out between Iraqi Shiite cleric Moqtada al-Sadr’s loyalists and Iraq’s military after the cleric announced that he would withdraw from politics. Military forces fought with al-Sadr’s supporters, with the police responding with tear gas and physical fights with protesters.
The cleric’s decision to quit politics came in the wake of a political crisis that has left the country without a new government, prime minister, or president for months.
The situation in Iraq, which pumps more than 4 million barrels per day (bpd), exacerbated oil supply fears and pushed prices higher. However, the ongoing ceasefire suggests that the country’s oil will continue reaching global markets unhindered.
By Alex Kimani for Oilprice.com
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