By Dr. Olgu Okumuş for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On Sept. 28, when Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan jointly stated their support for the sovereignty and territorial integrity of Iraq, they also made a point of stressing their countries’ continued commitment to two joint mega energy projects: the Turkish Stream gas pipeline and the Akkuyu nuclear power plant.

The success of these projects would diminish the importance of the Kurdistan Regional Government (KRG) as a regional economic actor, pushing the significance of its oil and gas resources into the background.

Given the KRG’s apparent hope to leverage such resources as part of a continued drive for independence — a drive Erdogan has said would lead to “even more serious mistakes” by the KRG — Erdogan and Putin’s joint statements are worthy of increased scrutiny.

This was the second visit by the Russian leader to Turkey since the improvement in relations that has taken place after ties suffered a major blow when Turkish forces shot down a Russian jet in November 2015. Putin’s first visit, in October 2016, was also energy-inspired, as it occurred at Erdogan’s invitation to participate in the 23rd World Energy Congress.

Last week’s meeting was labeled a “solely pragmatic meeting” by the Kremlin, because it covered several essential bilateral trade issues, such as Turkey’s purchase of Russia’s S-400 missile system, Russia’s embargo on Turkish tomatoes and the two countries’ joint energy projects. At the leaders’ press conference, they stressed their discussions on energy projects, while also commenting on international security issues such as Syria and the KRG independence referendum.

Turkey needs a cooler relationship with the KRG. Since January 2013, the Turkish-British joint venture Genel Energy’s truck-based deliveries from the KRG have been bypassing the Baghdad-controlled Kirkuk-Yumurtalik oil pipeline; the oil has instead been going to Turkey’s Ceyhan port on the Mediterranean Sea. This had already prompted concerns about the KRG’s drive for economic and political independence, and pushed Ankara into the middle of an international diplomatic crisis.

Iran’s Ministry of Roads and Urban Development warned companies against shipment of oil products to and from the Iraqi Kurdistan “until further notice”.

The decision is in line with Tehran’s series of measures in response to a referendum held in the semi-autonomous region on possible secession from Iraq which has drawn international criticism.

“Given the recent developments in the region, it is suitable that international transportation companies and drivers active in this field avoid loading and carrying oil products to and from the Iraqi Kurdistan Region until further notice,” a directive by the ministry’s Road Maintenance and Transportation Organization said.

“It should be noted that the consequences of any action in this regard would befall the relevant company,” it added.

The transportation is mostly carried out by tanker trucks which take crude oil from the Iraqi Kurdistan to Iran and carry back refined products to the region.

The Iraqi Kurdistan Region went ahead with its plan to hold the referendum on Monday while Iraq’s neighbors and countries in the Middle East, including Iran and Turkey, had voiced opposition to such a move and supported the Baghdad central government.

On Monday night, thousands of Kurdish people in favor of KRG’s secession from Iraq took to the streets in Erbil, with some waving Israeli flags to celebrate.

No one in the region, except Israel’s Prime Minister Benjamin Netanyahu, endorsed the referendum, and all neighbors have warned that the secession plan would bring instability to the region and disintegrate Iraq.

Pressure has been building on officials in Erbil, Kurdistan’s regional capital, over the referendum, with regional carriers, including Turkish Airlines, Egypt Air and Lebanon’s Middle East Airlines submitting to Baghdad’s request to suspend their flights serving Iraqi Kurdistan.

(Source: Tasnim, under Creative Commons licence)

Iraqi Prime Minister Haider al-Abadi has hinted that his government wants to take control of revenue generated from Kurdish oil exports.

The measure is the latest of a set of actions taken by Baghdad against the Kurdistan Region for carrying out last week’s referendum that saw a 92-percent vote for independence, the first of which saw a ban in international flights to and from the Kurdish region.

Abadi said in a tweet that his government wanted to pay monthly salaries of KRG employees with money from Kurdish oil sales.  “Federal government control of oil revenues is in order to pay KR (Kurdistan Region) employee salaries in full and so that money will not go to the corrupt,” Abadi tweeted.

The Kurdistan Region has described the Iraqi-imposed flight ban, and other measures as “collective punishment,” that, among others, affect the wounded Kurdish Peshmerga who need medical treatment abroad, and Yezidi survivors of IS atrocities.

Amanj Rahim, the secretary of the Kurdistan Regional Government (KRG), told the Kurdish parliament on September 30 that the oil export through Turkey’s Ceyhan pipeline was going ahead as normal.

Separately, Prime Minister Haider al-Abadi reassured Kurdish citizens they will remain secure even as the government escalates its measure against their region’s government over the recent referendum on independence.

You are citizens of the first degree, we will not allow any harm to you and we will share our loaf of bread together,” Iraqi Prime Minister Haider al-Abadi said, addressing Kurds via twitter on September 30. “To our people in the Kurdistan region: We defend our Kurdish citizens as we defend all Iraqis and will not allow any attack on them,” Abadi added.

(Source: GardaWorld)

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for September of 97,204,267 barrels, giving an average for the month of 3.240 million barrels per day (bpd), slightly more than the 3.216 bpd exported in August.

The exports were entirely from the southern terminals, with no exports from Kirkuk via Ceyhan.

Revenues for the month were $4.882 billion at an average price of $50.225 per barrel.

August export figures can be found here.

(Source: Ministry of Oil)

Russian oil company Rosneft has completed its due diligence on infrastructure of the export oil pipeline in Iraqi Kurdistan (‘KROP”) and will shortly finalise the legally binding documents on oil pipeline project under the Investment Agreement signed at St. Petersburg International Economic Forum in June 2017.

The Kurdistan Regional Government of Iraq and the Company intend further strengthen and develop cooperation and consider to expand Rosneft footprint in the region. The parties have negotiated Rosneft’s opportunity to participate in the project on funding of the construction project of Kurdistan Region’s natural gas pipeline infrastructure. It is expected that a separate agreement under this project will be finalized by year-end.

The Kurdistan Region gas pipeline will not only supply natural gas to the power plants and domestic factories throughout the region, but also enable exporting of substantial fuel volume to Turkey and European market in the coming years. The investment in the project will be on under a BOOT arrangement, to be recovered through tariff charges and an agreed rate of return basis. The pipeline capacity is expected to handle up to 30 BCMA for gas export, in addition to facilitating gas supply to the key domestic users.

Rosneft and Kurdistan Regional Government are negotiating implementation of the project for construction of gas pipeline system on a fast track basis. Commissioning of the pipeline and first domestic supplies are planned for 2019 and export supplies – 2020.

Successful implementation of the project under discussion will enable Rosneft to play a leading role in the building and expanding Kurdistan Region’s gas transport infrastructure and create synergy with existing projects for development of the oil and gas fields of the 5 blocks awarded to the Company in the region.

Sources close to the deal told Reuters that the investments would amount to more than $1 billion.

(Sources: Rosneft, Reuters)

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for August of 99,700,761 barrels, giving an average for the month of 3.216 million barrels per day (bpd), slightly less than the 3.226 bpd exported in July.

The exports were entirely from the southern terminals, with no exports from Kirkuk via Ceyhan.

Revenues for the month were $4.608 billion at an average price of $46.223 per barrel.

July export figures can be found here.

(Source: Ministry of Oil)

By John Lee.

Iraq’s Ministry of Oil has announced final oil exports for July of 100 million barrels, giving an average for the month of 3.226 million barrels per day (bpd), slightly more than the 3.273 bpd exported in June.

These exports were shipped by 33 multinational companies from the ports of Basra, Khor Al- Omaia and the SPM’s on the Arab Gulf, with no exports registered from Kirkuk.

Revenues for the month were $4.400 billion, at an average price of $44.00 per barrel.

June export figures are available here.

(Source: Ministry of Oil)

Reuters reports that a former Iraqi oil minister said it was necessary for Iraq to regain the Iraqi Pipeline in Saudi Arabia (IPSA), which has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990, and which was confiscated by Saudi Arabia in 2001 as compensation for debts owed by Baghdad.

Bahr Al Olum, who is currently a member of parliament, said he has discussed the issue with Saudi side expected that Riyadh would have a more “positive response” given an improved political environment between the two countries.

(Source: Reuters)

(Picture: Haider Al-Abadi meets King of Saudi Arabia, Salman bin Abdulaziz Al Saud, 19th June 2017)

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for July of 100,144,814 barrels, giving an average for the month of 3.230 million barrels per day (bpd), slightly less than the 3.273 bpd exported in June.

The exports were entirely from the southern terminals, with no exports from Kirkuk via Ceyhan.

Revenues for the month were $4.386 billion at an average price of $43.798 per barrel.

June export figures can be read here.

(Source: Ministry of Oil)

By John Lee.

Iraq’s Ministry of Oil has announced final oil exports for May of 98.2 million barrels, giving an average for the month of 3.273 million barrels per day (bpd), slightly more than the 3.261 bpd exported in May.

Exports from the southern terminals totalled 97.5 million barrels, with 700,000 barrels exported from Kirkuk.

Revenues for the month were $4.144 billion, at an average price of $42.2 per barrel.

May export figures are available here.

(Source: Ministry of Oil)