Oil production in Iraq’s semi-autonomous Kurdistan Regional Government (KRG)-ruled region continues to drop as export flows to Türkiye's Ceyhan port show few signs of restarting after a stoppage that has lasted almost two months.
Ankara halted Iraq’s 450,000 barrels per day (bpd) of northern exports through the Iraq-Türkiye pipeline 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 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.
The 59-day stoppage is estimated to have cost the KRG more than $1.5 billion. The halt, coupled with limited storage space in the region, sent most of the region's 450,000 bpd of production offline within weeks. Fields that had continued producing are now offline or operating with reduced output.
The 4,500 barrel per day (bpd) Taq Taq field is no longer producing into storage, said a spokesperson at operator Genel Energy.
The Khurmala field is now producing about 50,000 bpd, according to a source familiar with field operations.
This is a reduction from 100,000 bpd a month ago and 135,000 bpd before the pipeline stoppage.
The resulting lost revenue for the KRG stands at more than $1.5 billion, according to Reuters estimates based on exports of 375,000 bpd, the KRG's historic discount against Brent crude and 59 days of outages.
Iraq reportedly asked Türkiye this month to resume pipeline flows and loading operations at Ceyhan on May 13 after spending weeks resolving various issues with the KRG regarding a restart deal.
Turkish pipeline operator BOTAŞ said it needed more time to check the technical feasibility of the pipeline to resume flows, an Iraqi oil official said.
However, BOTAŞ has yet to receive instruction from Turkish authorities, the source said, citing unofficial contact with Turkish energy officials.
"We're talking about weeks, not days, as an expected time frame to resume exports. This issue is more political now than technical," the source said.
Iraqi government officials previously told Reuters they blamed the elections for the delay.
Türkiye held presidential elections on May 14, but neither of the two main candidates exceeded the required 50% of the votes, and a runoff is scheduled for May 28.
