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Global Energy Advisory Friday 20th October, 2017

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As tensions surrounding Kurdistan rise,…

Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan

Pipeline

Iraq’s Oil Minister Jabbar Al-Luiebi has ordered state-held oil and pipeline companies to begin restoring oil flows from Kirkuk to Turkish port Ceyhan via a pipeline that bypasses Kurdistan, increasing pressure on the breakaway region that voted for independence last month in a referendum strongly opposed and deemed illegal and invalid by the federal government.

Al-Luiebi has asked North Oil Company, the State Company for Oil Projects (SCOP), and Iraq’s state pipeline company to restore the pipeline to full operation, according to a statement on Iraq’s oil ministry website, as reported by Reuters.

Iraq had mostly stopped shipping oil via the Kirkuk Ceyhan pipeline after Islamic State militants overran Iraq’s northern provinces in 2014. U.S.-backed Iraqi forces have recaptured most of the oil infrastructure in the northern regions since then.

According to Iraq’s oil ministry, the country hopes to restore exports from the pipeline to the levels before 2014, when it exported between 250,000 bpd and 400,000 bpd.

The Kurdistan Regional Government (KRG) operates a pipeline that connects to Kirkuk-Ceyhan at Khabur on the border with Turkey.

Kurdistan produces around 600,000 bpd of crude oil, or about 15 percent of Iraq’s total output. Turkey is crucial to Kurdistan’s oil exports to the world, because most Kurdish oil is moved through a pipeline to Ceyhan.

On the day of the Kurdistan referendum, Turkish President Recep Tayyip Erdogan said that Turkey could cut off the crude oil flow from Kurdistan.

A few days later Turkey said that it supported Iraq’s decision that the oil trade should be done only by the central government, reaffirming it would deal only with Baghdad.

Related: Oil Giants At Odds As Saudi, Russian Ties Improve

Last week, Iraq, Iran, and Turkey took a unified stance against Kurdistan’s oil sector, increasing further pressure on the region after the referendum.  

Iraq’s Ministerial Council for National Security discussed on Monday “the official request of the government to Iran and Turkey to deal with the federal government exclusively with regard to the border ports and the closure of all ports with these two countries until the receipt of the administration by the federal government, and to stop all commercial transactions, especially on the export and sale of oil with the Kurdistan region and this be dealt with exclusively by the Iraqi Federal Government,” the media office of Iraqi Prime Minister Haider Al-Abadi said in a statement.

By Tsvetana Paraskova for Oilprice.com

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  • Naomi on October 11 2017 said:
    Kirkuk is part of Kurdistan. The Iraqi Army is unable to defend the pipeline against Peshmerga and US Air Force.

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