The central government is negotiating an agreement with Turkey to export oil from Iraqi Kurdistan and Kirkuk through the Kurdistan Regional Government’s (KRG) oil pipeline, the Oil Minister, Jabbar El Luaibi, said. Under the terms of the agreement, the exports would be controlled by Iraq’s oil marketing company, SOMO, Bloomberg reports.
“The problem is that Turkey said they have debts with the Kurdish region amounting to $4 billion and Turkey is demanding their payment,” El Luaibi said, adding that the federal government would not assume responsibility for the semi-autonomous region’s debt, according to Bloomberg.
Exports from northern Iraq dropped significantly after the central government seized the Kirkuk oilfields from the KRG last month. Prior to Baghdad’s intervention, the KRG had been exporting 600,000 barrels per day (b/d) through its pipeline to the Turkish port of Ceyhan. This number fell to less than 300,000 b/d after the government retook the oilfields.
Iraq has also announced plans to re-open an alternate pipeline to Turkey to allow the central government to resume exports to Turkey while bypassing the KRG’s pipeline.