Northern Iraqi Oil Exports: Resumption on the Horizon
Recent developments from the Northern Iraqi Oil Company indicate a significant shift in the region’s oil export capabilities. Authorities have confirmed plans to initiate the export of crude oil through the Turkish port of Ceyhan, targeting an initial volume of 100,000 barrels per day. This marks a critical step in the preparatory phase for resuming exports.
Preparation for Resumption
The Director General of the Northern Oil Company, Amer Khalil Ahmed, participated in strategic discussions involving the Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayyan Abdel-Ghani, alongside Turkish Energy Minister Alp Arslan Bayrakdar and their delegations. During these talks, it was emphasized that the Northern Oil Company is poised to restart oil exports from the Kirkuk fields to Ceyhan, with a preliminary target of 100,000 barrels per day.
The readiness to resume crude oil shipments hinges on an official directive from the Federal Ministry of Oil, with indications that operations could commence within hours. The Northern Oil Company has successfully completed repairs to the pipeline infrastructure that had previously been disrupted by ISIS attacks. This restoration involved the repair of critical segments between Kirkuk, Salah al-Din, Nineveh, and the Iraqi-Turkish border, ensuring the pipeline is primed for transporting designated volumes set by the Federal Ministry of Oil.
Current Production and Export Dynamics
Currently, the Northern Oil Company is operating at a production rate of approximately 250,000 barrels per day. Of this quantity, 10,000 barrels are allocated for export to Jordan, while about 100,000 barrels are utilized for local consumption. Additionally, civil refineries in Erbil and Sulaymaniyah are being supplied with specific quantities of crude oil to facilitate the production of gasoline and other oil derivatives.
According to sources within the Northern Oil Company, the operational pipeline has been ready for over a year, with prior tests on oil flow conducted in two stages. The initial phase successfully connected shipments from the Kirkuk fields to the Baiji refineries, while the subsequent stage involved multiple segments of the pipeline from Ain Jahsh to the final pumping station in Dohuk, demonstrating its full operational capability.
Negotiations and Technical Considerations
The future of oil exports is currently tied to ongoing negotiations between the Iraqi Ministry of Oil and Turkish authorities. While the Northern Oil Company is prepared to resume operations swiftly upon receiving notification from Baghdad, recent discussions have not yet finalized the terms of the agreement. Energy specialist Youssef Mahmoud noted that the testing phase is vital for assessing both the integrity of the pipeline and the operational readiness of the pumping stations.
Achieving a consensus on exporting oil to Turkey would be a pivotal factor in resolving technical issues surrounding the pipeline. The Kirkuk field has the potential to sustain an output of approximately 100,000 barrels daily, with capacity for additional production based on the Northern Oil Company’s capabilities.
Context of Operational Shutdowns
The backdrop of these developments includes a significant interruption in oil flow that occurred in March 2023, following a ruling that mandated Turkey to compensate Iraq with approximately $1.5 billion for transporting oil without Baghdad’s consent. This disconnection halted exports of around 500,000 barrels per day, leading to notable impacts in global markets due to diminished shipments from Iraq, a key supplier of crude oil.
Currently, Iraq’s operational plans include exporting 300,000 barrels per day once resumed, with efforts underway to persuade the Kurdistan Region’s government to channel oil sales through the Federal Oil Marketing Company.
Outlook
As of now, Iraqi Oil Minister Hayyan Abdul-Ghani has reiterated expectations for an impending resumption of oil flows, with anticipation that an agreement with Turkey could materialize soon. Previous statements indicated a potential restart within a matter of days, underscoring both the urgency and significance of this bilateral relationship in the region’s energy landscape.
As negotiations continue, the return of oil exports from the Kurdistan region through Turkey remains a critical component for stabilizing Iraq’s oil market and ensuring sustained economic growth in the sector.