Iraq seeks formal oil-export deal with Kurds


 Aug. 26, 2016 | 12:26 AM

Iraq’s resumption last week of oil shipments through a Kurdish-controlled pipeline bumped up its export capacity by 5 percent almost overnight. Now OPEC’s second-biggest producer is seeking a deal with the self-ruling Kurds to ensure it can maintain the increased flows. The central government in Baghdad has been locked in a dispute with the semiautonomous Kurdistan Regional Government in the north of Iraq since 2014, when the Kurds began selling their oil independently. In March, Iraq’s state-run North Oil Co. stopped using its only export route, the KRG’s pipeline to Turkey, for crude it pumped in Kirkuk province. The Oil Ministry ordered a restoration of these exports last week.

“We’re still waiting for an agreement on the details regarding who should receive the oil revenues,” Deputy Oil Minister Fayyad Al-Nima said Wednesday in a telephone interview.

The government is now exporting about 100,000 barrels a day from its Kirkuk fields, Nima said. Officials at the KRG’s Natural Resources Ministry didn’t immediately reply to requests for comment.

A formal accord could keep Iraq’s northern exports flowing smoothly, sustaining the producer’s recent increase in supply to global markets. Iraq has struggled to raise oil exports this year, due partly to its feud with the KRG, and a failure by the two sides to reach a political agreement could jeopardize the renewed shipments. The three Kirkuk fields – Baba Gorgor, Jambour and Khabbaz – can produce a combined 150,000 barrels a day for export.

“It looks like a very shaky foundation for the restart,” Richard Mallinson, an analyst at Energy Aspects Ltd. in London, said.

The central government and the KRG last reached a deal in December 2014, when they agreed that the Kurds would give Baghdad control of their exports in exchange for a full payment of their share of the federal budget.

Within six months, independent Kurdish exports had resumed, and each side was accusing the other of not meeting its obligations.

Iraq’s new oil minister, Jabbar al-Luaibi, fed hopes for a new agreement, saying on Aug. 15, his first day in office, that he saw ways to resolve the dispute.

“I don’t think it’s unreasonable to hope for two or three months of steady flows” of oil exports from Kirkuk, Robin Mills, chief executive officer of Dubai-based consultant Qamar Energy, said by phone.

“Beyond that it really depends. Does the new minister succeed in coming up with a more sustainable proposition?” he added.

Both governments could benefit from an agreement, not least because both are short of cash after more than two years of battling Daesh (ISIS) militants and weathering low oil prices. Iraq is exporting 3.8 million barrels a day, including oil sold by the KRG, Prime Minister Haider al-Abadi said Tuesday at a news conference.

“It’s in the interest of both governments to try and get as much revenue as they can at the moment,” Hannah Poppy, an analyst at The Risk Advisory Group in London, said by phone.

“It probably won’t be sustainable in the long term, simply because of the wider political disputes.”

http://www.dailystar.com.lb/Business/Regional/2016/Aug-26/368974-iraq-seeks-formal-oil-export-deal-with-kurds.ashx?utm_source=twitterfeed&utm_medium=twitter

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

HORN PEACE PRESS DAILY NEWS

Muktar Bashir Aden

Mosul Eye

To Put Mosul on the Global Map

Matters Of Life And Death

"We're all just walking each other home" ~ Ram Dass

Kamus Istilah

Yang Pernah Mbuat Aku Bingung

1001 Iraqi Thoughts

@IraqiThoughts

Sajad Jiyad

Iraq, politics, development

WordPress.com News

The latest news on WordPress.com and the WordPress community.

%d bloggers like this: