BAGHDAD: Iraq’s federal government and the Kurdistan autonomous region signed an agreement on Tuesday to allow Kurdish oil exports to restart through Turkey after they were halted ten days ago, officials said.
The accord, inked in Baghdad under the supervision of Prime Minister Mohamed Shia al-Sudani and Kurdish leader Masrour Barzani, was to be implemented “today,” a Kurdish regional government official said.
The agreement comes two days after Iraq, Saudi Arabia, and several other big oil exporters announced a sharp slash in their production from next month, increasing oil prices.
Barzani said on Twitter that the agreement is “temporary” until parliament passes a new oil and gas law, but he termed it a crucial step towards ending the old dispute between Baghdad and Arbil.
The agreement thrashed out in negotiations between federal and regional officials, spells the end of the Kurdish regional government’s independent oil exports, and reflects a clear limit to its autonomy.
Turkey stopped Iraqi Kurdish oil
Turkey had stopped handling Iraqi Kurdish oil in March after an international tribunal ruled in a 9-year-old dispute that Baghdad was right in insisting on overseeing all Iraqi oil exports.
Sales of Kurdistan crude oil will be managed from henceforth by the State Oil Marketing Organization, an official of the federal government, and a Kurdish official.
A joint committee formed by the central and regional governments will supervise the export activities.
Revenues will be placed into an account under the helm of the Kurdish government, which the government in Baghdad will oversee.
The stoppage in exports through a pipeline to the Turkish Mediterranean port Ceyhan had left foreign oil companies with nowhere to pump Kurdish oil.
Norway’s DNO, one of the big firms operating in Iraqi Kurdistan, said it was stopping production at its wells.
Before Ankara’s action on 25 March, the autonomous region was exporting nearly 450,000 barrels per day of crude.
