Kurds Could Start Oil Deliveries to Baghdad in 2020, Says Iraqi Minister

Deliveries should have begun under a deal agreed two years ago

Iraqi Kurds wave flags of Iraqi Kurdistan during a demonstration outside the UN Office in Arbil, the capital of the autonomous region, on October 21, 2017, protesting against the escalating crisis with Baghdad
AFP PHOTO / SAFIN HAMED

The semi-autonomous Kurdistan Region of Iraq could start delivering 250,000 barrels per day (bpd) of oil to the Baghdad federal government by early 2020, Iraq's oil minister said.

The oil would be delivered to state oil marketer SOMO which would export it via pipeline through the Turkish port of Ceyhan, Thamer Ghadhban said in a televised interview late on Thursday.

Deliveries should have begun under a deal agreed two years ago.

"The Kurdistan Regional Government is obliged to send no less than 250,000 bpd to SOMO for it to sell in Ceyhan in Turkey, and the returns go to the federal budget," he told the local broadcaster al-Ahd.

The region produced 440,000 bpd last month, he added.

Kurdistan's oil exports have long been a source of contention with Baghdad. The Kurds, who control Iraq's only northern pipeline, had been exporting oil independently since 2013. Exports from Kirkuk restarted in 2018, after a year-long freeze following a failed bid for independence.

The backlash was swift and pushed Iraq to the brink of civil war as Baghdad launched a military offensive which threatened to undo years of unprecedented autonomy the region had enjoyed.

Exports from smaller oilfields under the regional government's control continued.

Relations have improved with a change of governments in Baghdad and Erbil, the Kurdish region's capital.

As part of the 2018 and 2019 budgets, the Kurdistan Regional Government agreed to send 250,000 bpd to federal authorities in exchange for Baghdad paying civil servant salaries.

"The 2019 federal budget law is very clear about the obligations of both the federal and regional governments," the minister said, adding that the Kurds had yet to send any oil.

He said this could change in 2020 and he had told SOMO officials "to prepare themselves for receiving 250,000 bpd starting next year because that's what I understand from talks."

A team of Kurdistan Regional Government ministers was due to arrive in Baghdad in Sunday to discuss budget issues, he said.