Russian Company Mediates Erbil-Baghdad Oil Export Talks #Energy
According to sources, Russia’s Rosneft oil company is playing an important role as mediator in talks between the Kurdistan Regional Government (KRG) and Iraq’s federal government to resume the full flow of oil exports from the Kurdistan Region.
Iraqi forces took control of Kirkuk’s oil fields, half of which had been under the administration of the KRG, in military operations following the Kurdistan Region’s independence referendum, held the previous month.
The takeover decreased oil exports from the semi-autonomous region to Turkey by half, said Kurdish Prime Minister Nechirvan Barzani, weeks after Iraqi forces and Iranian-backed Shia Hashd al-Shaabi (PMF) militias took over the oil-rich province.
Iraqi Prime Minister Haider al-Abadi said on Feb. 27 that Baghdad and Erbil had reached an agreement to resume full oil exports.
In a recent press conference, Barzani stated that the KRG and the Iraqi government have agreed to resume Kirkuk’s oil exports through the Kurdistan Region’s pipeline to Turkey, and in return, Baghdad would provide the long-awaited salaries of KRG public employees from that revenue.
Barzani added that the two sides verbally agreed during talks, but an official agreement has yet to be signed.
The KRG has told Baghdad it is ready to resume full exports and transfer the funds raised to Baghdad on two conditions, two industry sources told Reuters on Monday. The first is that the region would keep some of the oil for local refining, and the second is that Baghdad would pay all pumping tariffs to Rosneft.
The Russian oil company took over ownership of the Kurdistan Region’s oil and gas export pipelines in 2017 and, in exchange, agreed to give the Region $2 billion in loans. The deal was not recognized by the Iraqi federal government, which labeled the KRG’s independent oil exports as illegal.
“Erbil offered a quick-fix solution and communicated it to Baghdad, but has yet to hear a final answer,” one of the anonymous sources told Reuters, adding, “In the long run, we need to agree on budget transfers and debts to find a long-lasting compromise over exports.”
While the US, UK, and the EU urged the Kurdistan Region to postpone the September referendum on independence, Russia voiced no opposition.
Recently, Iraq’s Foreign Minister Ibrahim al-Jaafari stated that Baghdad would not rule out the participation of any foreign oil company in the country. Jabar al-Luaibi, Iraq’s oil minister, also stated that Baghdad has no problem with Rosneft operating in the Kurdistan Region.