A delegation of Turkish energy officials Monday met with Iraqi oil officials in Baghdad to discuss a resumption of Iraq’s northern oil exports, according to sources.
“We are discussing all technical aspects regarding the restarting of oil exports. A decision to resume flows will not happen today, and more meetings are expected,” an oil official familiar with the meeting told Reuters anonymously.
Türkiye halted Iraq’s 450,000 barrels per day (bpd) of exports through a crude oil pipeline from the semi-autonomous Kurdistan Regional Government (KRG) in northern Iraq to the Turkish port of Ceyhan on March 25 after an arbitration ruling by the International Chamber of Commerce (ICC).
The ICC ordered Türkiye to pay Baghdad damages of $1.5 billion for what it said were unauthorized exports by the KRG between 2014 and 2018.
Ankara said the ICC had recognized most of Türkiye’s demands. Its Energy Ministry said the chamber ordered Iraq to compensate Türkiye for several violations concerning the case.
Türkiye wants to negotiate the size of damages it was ordered to pay in the arbitration ruling and also seeks clarification on other open arbitration cases, another oil official told Reuters.
“A decision to restart oil flow needs political talks on higher levels. Issues blocking the resumption of oil exports are more political than technical,” said a second oil official.
Turkish Petroleum Pipeline Corporation (BOTAŞ) has said the pipeline needs further technical checks before a restart and would send a technical note on the pipeline’s status.
Attempts to restart the pipeline were delayed by Türkiye’s presidential elections last month and discussions between state-owned marketer SOMO and the KRG over an export deal, which has now been reached.
Hopes of a restart increased when President Recep Tayyip Erdoğan named Alparslan Bayraktar as energy and natural resources minister on June 3 as part of his cabinet for his new five-year term.
The Reuters estimate that the Iraqi Kurdish region has lost more than $2 billion over the 80 days of the pipeline outage is based on exports of 375,000 barrels per day and the KRG’s historic discount against Brent crude.
The pipeline also exported around 75,000 bpd of federal crude from Iraq’s Kirkuk oilfields.
Meanwhile, Iraq’s parliament last week approved a 2023 budget that included some articles that remove the KRG’s financial autonomy.
The KRG region is short of cash because of the pipeline halt. Iraqi politicians and Kurdish lawmakers said it had no option but to accept the budget, which will receive 12.67% of the 198.9 trillion dinars ($153 billion) allocation.
