Millennium Post (Kolkata)

Iraq & oil cos trade blame over shut Turkey pipeline, stuck in legal & financial limbo


Foreign oil firms operating in Iraq’s Kurdistan region are partly to blame for the delay in resuming crude exports after failing to submit contracts for revision, Iraq’s oil ministry said.

The Iraq-Turkey oil pipeline (ITP) which once handled about 0.5 per cent of global oil supply has been halted, stuck in legal and financial limbo, since March 2023, Reuters reported.

The flows were halted after the Paris-based Internatio­nal Chamber of Commerce in a longstandi­ng arbitratio­n case ruled Ankara had violated provisions of a 1973 treaty by facilitati­ng such exports without the consent of the Iraqi federal government.

Iraq’s oil ministry in a statement published late on Sunday noted that foreign companies, alongside the Iraqi Kurdish authoritie­s, have still not submitted contracts for revision to the ministry.

The government is seeking to revise such deals after a court ruled ones signed with the Kurdistan Regional Government (KRG) were invalid, it said in response to a statement on Saturday by the Associatio­n of the Petroleum Industry of Kurdistan (APIKUR).

Iraq’s federal court in 2022 deemed an oil and gas law regulating the Kurdistan region’s oil and gas industry as unconstitu­tional.

Iraq owes Turkey minimum payments as long as the pipeline is technicall­y operationa­l - estimated by consultanc­y Wood Mackenzie at around $25 million per month. APIKUR has cited a similar figure saying it understand­s Iraq owes $800,000 in daily penalties.

APIKUR said the government of Iraq had not “taken the required actions” to reopen ITP, adding that “there has been no real progress” to reopen ITP despite meetings in Baghdad in January between representa­tives of the Iraqi government, the KRG and internatio­nal oil companies.

APIKUR said its member companies’ “current commercial terms and economic model must be maintained” and called for payment assurances for past and future oil exports.

Iraq’s Prime Minister Mohammed Shia al-Sudani is due to meet U.S. President Joe Biden in Washington on April 15 to discuss the future of the US-led coalition in Iraq, as well as Iraqi financial reforms and a U.S. push to wean Iraq - a rare ally of both Washington and Tehran - off Iranian power and gas.

APIKUR said it had conveyed to members of Biden’s administra­tion and Congress that the White House should not proceed with the planned visit unless flows through ITP resume, internatio­nal oil firms get payment assurances and the Iraqi government fully implements the Iraqi federal budget for the KRG.

 ?? ??

Newspapers in English

Newspapers from India