Iraq plans to export Kirkuk oil through Iran


BAGHDAD : The Iraqi government is planning to sell crude from oilfields in Kirkuk through Iran, in case oil and budget talks with the Kurdistan Regional Government (KRG) fail, a senior oil ministry official in Baghdad told Reuters.

Iraq’s State Oil Marketing Organisation (SOMO) plans to hold talks with the Kurdish Regional Government (KRG) possibly next week, about Iraqi oil exported through Turkey.

Deputy Oil Minister Fayadh al-Nema said in an interview that if the negotiations come to a close without an agreement we will start to find a way in order to sell our oil because we need money, either to Iran or other countries.

Iraq has ports on the Gulf but they are not linked to the northern Kirkuk fields by pipeline. Iraq’s North Oil Company resumed pumping crude through the Kurdish-controlled pipeline to Turkey as “a sign of goodwill to invite them (the Kurds) to start negotiations,” Nema said.

Iraq, OPEC’s second-largest producer after Saudi Arabia depends on oil sales for 95 percent of its public income. Its economy is reeling under the double impact of low oil prices and the war against Islamic State militants.

The Kurdistan region produces around 500,000 barrels per day (bpd) on its territory and exports those volumes via Turkey. Baghdad would not be able to reroute those volumes to Iran but could order shipments of some 150,000 bpd via Iran that are being produced in the nearby province of Kirkuk.

An agreement between Iran and Iraq could function in a similar fashion as oil-swap deals Tehran had with Caspian Sea nations. Iran would import Iraqi oil to its refineries and export an equivalent amount of its own crude on behalf of Baghdad from Iranian ports on the Gulf.

Source : Reuters



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