Continued halt of Kurdistan’s oil exports takes oil sector to a dark tunnel
A worker adjusts valve gears of pipes linked to oil tanks at Turkey’s port of Ceyhan. Photo: Reuters
Baghdad (IraqiNews.com) – Oil production from the Kurdistan region of Iraq continued to decline, with no significant indications of oil export resumption to the Turkish port of Ceyhan, following a continuous halt for nearly two months.
Turkey stopped northern Iraq’s exports of 450,000 barrels per day, through the Iraqi-Turkish pipeline, on March 25, after an arbitration decision issued by the International Chamber of Commerce (ICC).
The ICC ordered Turkey to pay $1.5 billion in compensation to Baghdad for the unlicensed exports carried out by the Kurdistan Regional Government (KRG) between 2014 and 2018.
It is estimated that the two-month stoppage cost the KRG more than $1.5 billion.
Due to the limited storage capacity in the Kurdistan region, most of the region’s production of 450,000 barrels per day stopped within weeks.
Oilfields that continued to produce after oil exports stopped now have to suspend or reduce production.
The spokesperson of Genel Energy, which operates the Taq Taq oilfield in northern Iraq, said that the oilfield is no longer producing and pumping to storage facilities, adding that it was producing 4,500 barrels per day before the halt.
The Iraqi Minister of Oil, Hayan Abdul-Ghani, said in mid-May that Iraq wants to resume oil exports through the pipeline from the Kurdistan region in northern Iraq to the Turkish port of Ceyhan, but it is waiting for Turkey’s approval.
The KRG mentioned in a previous statement that it is awaiting a final agreement between the federal government in Baghdad and the Turkish government to resume oil exports.