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Kurdistan Oil Flows Yet To Resume After Export Deal

Most of Kurdistan’s large oilfields remain shut in as exports from the semi-autonomous region of Iraq to Turkey and the Turkish port of Ceyhan have yet to resume following the Iraq-Kurdistan deal on restarting oil exports, Reuters reported on Thursday, quoting anonymous sources with knowledge of the matter.

Kurdistan and the federal government of Iraq reached an agreement earlier this week to resume exports via an Iraq-Turkey pipeline and the port of Ceyhan on the Mediterranean.

Oil flows from Kurdistan were stopped at the end of March, forcing companies to either curtail or suspend production because of limited capacity at storage tanks.

Kurdistan’s crude oil exports – around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets – were halted in late March by the federal government of Iraq.

A few days earlier, the International Chamber of Commerce ruled in favor of Iraq against Turkey in a dispute over crude flows from Kurdistan. Iraq argued that Turkey shouldn’t allow Kurdish oil exports via the Iraq-Turkey pipeline and Ceyhan without approval from the federal government of Iraq.

Now that an agreement between Iraq and Kurdistan is in place for the resumption of exports, Iraq is awaiting a response from Turkey, according to one of Reuters’ sources.

Pipeline operators have not yet received instructions to resume flows, another source told Reuters.

London-listed Gulf Keystone Petroleum, Norway-based DNO ASA, and Canada-based Forza Petroleum suspended output at their operated fields in Kurdistan early last week and have yet to announce the resumption of production.

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“It is unfortunate it has come to this given the likely impact of a continuing supply disruption on oil prices and at a fragile time in global financial markets,” DNO’s Executive Chairman Bijan Mossavar-Rahmani said on March 29 when the company announced it had started an orderly shutdown of its operated oil fields in Kurdistan.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on April 06 2023 said:
    First it isn’t Kurdistan oil. It is Iraqi oil as Kurdistan isn’t an independent country but an integral region of Iraq.

    Second, the Kurdistan Regional Government (KRG) can only export Iraqi oil by permission from the Federal government of Iraq according to the Iraqi constitution and it will get a share of Iraqi oil export revenues like other regions of Iraq.

    Third, Turkey has no authority to let Iraqi oil exports pumped by the KRG via the Iraqi-Turkish pipeline (ITP) against the wishes of the Federal government of Iraq be exported from the Turkish Ceyhan port on the Mediterranean to customers around the world.

    These are the conditions for a resumption of Iraqi oil via Iraqi Kurdistan.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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