Talks on resuming Iraqi oil flows to Turkey once again have ended in deadlock for the second time in a week despite Washington applying pressure to Iraq to resume the exports, Reuters has reported. Export flows to Türkiye’s Ceyhan port stopped two and half years ago after Ankara halted Iraq’s 450,000 barrels per day (bpd) of exports through the Iraq-Türkiye pipeline following an ICC ruling that Türkiye should pay Baghdad damages of $1.5 billion for unauthorized exports by the KRG. The stoppage is estimated to have cost the KRG billions of dollars. Iraq is OPEC’s second largest producer after Saudi Arabia. Iraq’s economy relies heavily on crude oil exports, with crude accounting for more than 90 percent of the country’s revenues.
However, it’s not all doom and gloom for Iraq’s beleaguered energy sector. Last year, British Oil & Gas giant BP Plc (NYSE:BP) agreed to develop Iraq’s Kirkuk oil and gas fields based on a profit-sharing model, Iraqi oil ministry officials revealed. According to the officials, Kirkuk oil fields are currently producing 245,000 barrels of crude per day.
Meanwhile, French oil and gas multinational TotalEnergies (NYSE:TTE) reached an agreement with the government of Iraq to start a long-delayed $27 billion energy project. Total first signed a deal with the Iraqi government in 2021 that would see Total build four oil, gas and renewables projects in southern Iraq over 25 years with an initial investment of $10 billion. Unfortunately the giant project was shelved amid disputes and squabbling between Iraqi politicians over terms of the deal. However, Iraq finally agreed to a smaller 30% stake in the project, setting in motion a deal that could lure foreign investment back into the country. After years of instability, Iraq has been enjoying a period of relative stability, increasing the chances of foreign investors returning to the country.
“The government of Iraq confirmed the whole contract, no modification at all … so that was for me more than good news,” Total Chief Executive Patrick Pouyanne has told Reuters.
By Alex Kimani for Oilprice.com