Baghdad demands oil deal with KRG

BAGHDAD, March 22, 2016 – Iraqi Minister of Oil Adil Abd Al Mahdi on Tuesday said that an agreement with the Kurdistan Regional government (KRG) would be a precondition for Baghdad to resume pumping crude from fields managed by North Oil Company (NOC) through the KRG-owned pipeline carrying Kirkuk crude to Ceyhan.

Also transporting oil from fields under the supervision of the KRG, the pipeline’s supplies from NOC were halted on March 11. Based on figures from the KRG’s Ministry of Natural Resources, the decision would result in losses of more than 150,000 bopd on average to the KRG’s monthly export volume if upheld.

“We have two options,” Al Mahdi wrote on his Facebook page, saying that the two parties would either have to revisit the December 2014 agreement between Bagdad and the KRG or draft a new agreement on revenue sharing if the flow of oil from NOC is to resume.

The 2014 deal that saw the KRG transfer 550,000 bopd to Iraq’s Oil Marketing Company for exports in return for a 17% share of the federal budget but broke down in 2015 due to the oil price collapse.

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