Iraq, Kurdistan region close to ending oil dispute

Iraq’s central government and the country’s semi-autonomous Kurdistan region are close to reaching an agreement to end their dispute over Erbil’s crude exports, says Genel Energy which operates in the region.

On Thursday, Mehmet Sepil, the Anglo-Turkish Genel Energy company’s president, who was familiar with the negotiations between Baghdad and Erbil, told Reuters that he saw an agreement over the sharing of oil revenues approaching.

“We have never been this close to a deal,” said Sepil, adding, “The issues that caused an impasse have been identified. There’s been quite a bit of progress made.”

Iraq’s Kurdistan Regional Government (KRG) and Turkey have recently signed a multi-billion-dollar energy package. Under the deal, Kurdistan’s oil can reach Turkey and the global markets via the Mediterranean Sea.

The Kurdistan-Turkey agreement has infuriated Baghdad which claims sole authority over Iraqi oil exports. However, the KRG says it has the right to sell the semi-autonomous region’s oil independently.

Baghdad has threatened to take legal action against the firms which lift the Kurdish oil via the KRG pipeline. The Iraqi Ministry has reportedly instructed the law firm Vinson and Elkins to pursue those who buy the crude exported from the Kurdistan region to Turkey’s port city of Ceyhan.

Despite the firey statements exchanged between Baghdad and Erbil over the Kudistan region’s crude exports in the past months, talks between the two sides have continued.

On February 1, Iraq’s Deputy Prime Minister for Energy Affairs Hussain al-Shahristani said some progress had been made in Baghdad-Erbil negotiations, adding a solution could be found soon.

Shahristani also said in January that his country “considers the export of oil through its international borders without government approval as a violation.”

Iraq’s Prime Minister Nouri al-Maliki has described Erbil’s crude exports to Turkey as a “constitutional violation” which the Arab country would “never allow, not for the [Kurdistan] region, nor for the Turkish government.”