BAGHDAD: A major pipeline connecting Iraq’s semi-autonomous Kurdistan region to Turkiye is ready to reopen and resume exports, the Kurdish foreign minister said on Tuesday, potentially ending a dispute between Baghdad and Irbil that led to the closure of the pipeline in 2023.
Foreign Minister Safeen Dizayee declined to say when the pipeline would reopen but said it would mark a turning point in relations between Kurdistan and Baghdad.
Iraq’s oil minister said on Monday the Iraq-Turkiye pipeline (ITP) will resume next week.
“All arrangements that were set on the table have been agreed to, with the aim to prepare for re-exports. There shouldn’t be any hiccups. The legal aspects have been met, the technical aspects are in place,” Dizayee told Reuters by phone. “The button just has to be pushed to increase production and then re-export.”
The oil flows were halted by Turkiye in March 2023 after the International Chamber of Commerce ordered Ankara to pay Baghdad damages of $1.5 billion for unauthorized pipeline exports by the Kurdistan Regional Government between 2014 and 2018.
Negotiations to restart the pipeline have been ongoing, with US officials participating in some of the talks.
Resuming oil exports will boost the Kurdistan region’s budget, Dizayee said.
“This means Kurdistan will benefit from the federal budget and hopefully this will end the saga of (civil servants’) salaries coming or not coming, received in dribs and drabs,” Dizayee said.
Baghdad has periodically withheld the Kurdistan region’s share of the federal budget to try to stop it from exporting oil independently.
Oil producers in the Kurdistan region have had to wind down production without an export route. It will likely take some time for them to restart their oil wells and for the pipeline to use its full capacity. Before it was shut down, it transported around 450,000 barrels per day.
“They’ve invested a lot. It was a risk they took and it must pay off. They [the companies] need assurances that their investment will not be down the drain,” Dizayee said. “Compensation is something that needs to be discussed.”
An international consultancy will be brought in to do an assessment of the cost of production, expenses, cost recovery and the production sharing agreements, he said.
