NOC Allows Kirkuk Oil to Enter Kurdish Pipeline

Iraq, August 20, 2016

Heightening speculation that a new, comprehensive deal may be reached between the Kurdish Regional Government (KRG) and Baghdad over oil exports and revenues, news has emerged that the federal North Oil Company (NOC) is allowing exports of Kirkuk crude via the Kurdish pipeline through Turkey.

This could add up to 150,000 bpd to Kurdish exports, although 70,000 bpd is currently going through the pipeline with plans to reach 100,000 bpd. Previously, the NOC had been re-injecting the oil rather than see the Kurds export it.

Over the summer of 2014, Kurdish Peshmerga forces occupied many of the oilfields in and around Kirkuk after Iraqi forces withdrew in the face of the Islamic State. Many in Baghdad see this as an illegal occupation of territory, but the federal North Oil Company still continues operations on some fields.

The new good will gesture could be a sign that a revenue and exports deal could again be on the table, and some have speculated a new deal may involve independently auditied quantities of Kurdish crude being sent to Iraq’s federal State Organization for the Marketing of Oil (SOMO) while the Kurdish equivelent (KOMO) would be allowed a quota of independent exports, with Baghdad transferring 17% of the budget (minus “sovereign expenses”) to Erbil.