The Russian oil giant, Rosneft, is set to invest $1.8 billion in the primary oil pipeline of the Kurdistan Regional Government (KRG) for a 60% stake, Reuters reports.
The current operator, the KAR Group, will retain a 40% stake in the pipeline, according to CNBC.
The company plans to increase the pipeline’s capacity to 950,000 barrels per day (b/d), CNBC reports.
The move comes even as political tensions rile Iraq’s oil markets.
Last week, the central government in Iraq seized control of the Kirkuk oilfields, previously controlled by the KRG. The action has resulted in a significant decrease in oil transiting through the Kurdish pipeline to Turkey.
The central government has also proposed reopening the Kirkuk-Ceyhan pipeline, a move that would permit the central government to bypass the Kurdish pipeline and export oil directly to Turkey, the Financial Times reports.
The move marks a doubling down of Russian investments in the semi-autonomous Kurdish region despite the ongoing tensions between Baghdad and Irbil.
Rosneft has invested heavily in the Kurdish region. The company has agreed to invest $400 million for exploration and has loaned the KRG $1.2 billion, according to Reuters.
In September, sources told Reuters that Rosneft planned to invest $1 billion to develop natural gas pipelines in Kurdish territory.
The KAR Group is a KRG-based energy company that builds and operates oil and gas pipelines, according to Bloomberg.