Iraqi Kurdistan loses $4 billion due to oil exports halt
A worker adjusts valve gears of pipes linked to oil tanks at Turkey’s port of Ceyhan. Photo: Reuters
Baghdad (IraqiNews.com) – The Association of the Petroleum Industry of Kurdistan (APIKUR) said that the closure of the Iraqi oil export pipeline to the Turkish port of Ceyhan has cost producers and the Iraqi government losses of about $4 billion.
According to the APIKUR, which includes a group of foreign and local companies working in oil production, losses are expected to continue despite initial talks between the Iraqi and Turkish governments to resolve the outstanding issue.
Producers in the northern Iraqi region were forced to reduce oil production since Turkey stopped oil flows through the pipeline.
Turkey stopped Iraq’s exports of 450,000 barrels per day through the oil pipeline that extends from the Kurdistan region of Iraq to the Turkish port of Ceyhan on March 25.
The halt of oil exports from the Kurdistan region of Iraq cost the Kurdistan Regional Government (KRG) billions of dollars.
Turkey’s decision to suspend oil exports followed an arbitration decision issued by the International Chamber of Commerce (ICC) in Paris.
The decision obliged Turkey to pay Baghdad $1.5 billion in compensation for damages caused by the KRG’s export of oil without permission from the federal government in Baghdad between 2014 and 2018.
The KRG began exporting crude oil independently in 2013, a step Baghdad considered illegal.
APIKUR also announced that its member companies would not resume oil production even if the government reached an agreement with the Turkish authorities.
APIKUR said that it will not export oil via the pipelines until it reaches an agreement ensuring the rights of international oil companies to receive their payments for the exported oil in the past and in the future.
Last week, the Iraqi Minister of Oil, Hayan Abdul-Ghani, met in the Turkish capital, Ankara, with the Turkish Minister of Energy and Natural Resources, Alparslan Bayraktar, and highlighted the importance of the oil pipeline between Iraq and Turkey.
The two officials emphasized the need to resume crude oil flows after finishing the rehabilitation processes, which the Turkish side described as necessary after the earthquake that struck Turkey last February.