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% of global oil supply has been halted, stuck in legal and financial limbo, since March 2023.
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 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. 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 payments as long as the pipeline is technically operational - estimated by consultancy Wood Mackenzie at around $25 million per month.
Published in The Express Tribune, March 26th, 2024.
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