Kurdish group, Patriotic Union of Kurdistan (PUK)-a rival of the ruling Kurdistan Democratic Party-has agreed with Iraq's central government to keep oil from the Kirkuk oilfields flowing via a pipeline to the Turkish export terminal Ceyhan on the Mediterranean, Reuters reported on Wednesday, citing PUK leader Kosrat Rasul.
Last week, production from the Kirkuk fields in northern Iraq was disrupted after Kurdish protestors seized a pumping station in order to protest the policies of Baghdad and Erbil, the capital of the autonomous Kurdish area. The protest was allegedly inspired by Kurdish demands that Baghdad authorize the construction of a refinery in Kirkuk, and they shut down the line shipping oil to Turkey. Kirkuk fields were producing 120,000 bpd before the incident temporarily halted operations.
Today, PUK's Rasul told Reuters that an agreement was reached yesterday between his group and Iraq's Prime Minister Haider al-Abadi.
The deal was reportedly reached after Baghdad agreed to boost the capacity of the Kirkuk oil refinery, and thus PUK withdrew its threat to shut the pipeline to Ceyhan, according to a Kurdish source close to the talks, who spoke to Reuters.
Iraq's oil ministry said on Wednesday that it had boosted the refinery's capacity by 10,000 bpd to 40,000 bpd. Another unit at the facility with another 10,000 bpd of capacity is expected to start operations by the end of the year, the oil ministry noted, as quoted by Reuters.
Related: Iraq To Start Drilling In Highly Contested Persian Gulf
The Kurdistan Regional Government led by Massoud Barzani of the ruling Kurdistan Democratic Party started independent exports of oil from the Kirkuk fields in 2014. The regional government struck a deal with the central Iraqi government last year to split oil export revenues equally, but the PUK party has been opposing the deal with Baghdad. Kurdish parties in the Kurdistan region have been quarreling over oil revenues lately.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More