KIRKUK,— The Northern Oil Company in Kirkuk halted pumping oil through Iraqi Kurdistan-Ceyhan pipeline on Sunday, March 13, due to the dispute between Baghdad and Erbil. The Head of the Energy Committee in Kirkuk’s Provincial Council, Ahmad Askari, told NRT the cessation of Kirkuk’s oil exports came from a decision by the Iraqi Oil Ministry.
The company normally exports 150,000 barrels a day through the pipeline that carries the crude to the Turkish terminal of Ceyhan, passing through territory of the Kurdistan region.
A Kurdish Regional Government KRG official confirmed the pipeline is not receiving crude from North Oil.
The order to halt pumping through the pipeline came from the oil ministry in Baghdad, a company official, who asked not be identified, told Reuters. “There is no technical failure, it’s a decision from Baghdad,” he said.
Kirkuk is believed to have close to 8.7 billion barrels, or about 30 percent of Iraq’s total oil reserves.
NOC used to operate in four of Kirkuk’s oil fields but when the Islamic State (IS) entered the area, two of its oil fields, Bay Hasan and Nan, came under the control of the Kurdistan Regional Government’s (KRG) Ministry of Natural Resources.
Since a dispute in early 2014 the Kurdistan Regional Government (KRG) has faced an economic crisis which saw its share of the Iraqi federal budget delayed. Erbil increased independent oil exports in an effort to make up for dwindling payments, further straining relations with the central government.
The global slump in oil prices, the fight against IS and an influx of Syrian refugees and displaced Iraqis have added more pressure on the KRG’s economy.
The KRG has struggled to pay salaries on time for public employees in the region, with some having gone up to five months without wages.
Senior KRG officials announced earlier this year they would cut government employee salaries by 15 to 75 percent, depending on position and salary bracket, as part of austerity measures to deal with the ongoing economic crisis.
Officials said the remaining salary amount would be credited and paid back to workers once the region emerges from the financial crunch.
The oil-rich province of Kirkuk is one of the most disputed areas by the Kurdistan regional government and the Iraqi government in Baghdad.
The Kurds are seeking to integrate Kirkuk province into the semi-autonomous Kurdistan Region clamming it to be historically a Kurdish city. Kurds have a strong cultural and emotional attachment to Kirkuk, which they call “the Kurdish Jerusalem.” Kurds see it as the rightful and perfect capital of an autonomous Kurdistan state.
The Kurds took full control of Kirkuk in August 2014 as the Iraqi army collapsed in the north and Islamic State militants overran almost a third of the country.