ANKARA: The northern oil export route from Iraq through Turkey is set to recommence operations in the near future following inspections for pipeline maintenance and repairs due to flood damage, announced the Turkish energy minister. Alparslan Bayraktar stated that a comprehensive survey of the oil pipeline has been concluded, and it will soon be “technically” prepared for operation.
Turkey had suspended oil flows on Iraq’s northern oil export route on March 25, following an arbitration ruling by the International Chamber of Commerce (ICC) that mandated Ankara to compensate Baghdad for unauthorized exports by the Kurdistan Regional Government (KRG) between 2014 and 2018. In response, Turkey initiated maintenance work on the pipeline, citing flood damage in its location within a seismically active zone.
Bayraktar did not specify a date for the resumption of oil flows but mentioned that the independent surveyor had completed their assessment, with an embargoed press briefing held by the ministry on Thursday. It is expected that oil flows will not resume before October, resulting in an approximate $4 billion loss in exports for the KRG.
Furthermore, Turkey claims that Iraq owes $950 million as a consequence of the ICC arbitration, after accounting for damages Turkey must pay to Iraq. Bayraktar also indicated that Ankara intends to file a “set-aside case” in a Paris court. In April, Iraq initiated an enforcement case against Turkey in a U.S. federal court to enforce a $1.5 billion arbitration award.
Bayraktar emphasized the need to find an amicable solution as neighboring countries while safeguarding their respective interests from a legal perspective. He acknowledged the possibility of future legal challenges but reassured that the pipeline is technically prepared for operation.
Turkey’s primary objectives include urging Baghdad to withdraw a second arbitration case pertaining to the period from 2018 onward and negotiating a reduced payment. Additionally, Turkey seeks to facilitate an agreement between Irbil and Baghdad regarding the continuation of the pipeline agreement, which is scheduled to expire in 2026.