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There have been historical disputes over how oil revenues are shared and how much money Baghdad should transfer to Kurdistan for public salaries and other regional expenses. This visit might be aimed at resolving or discussing these ongoing financial disagreement.
The Kurdistan Region's obligation to export oil through SOMO this agreements outlined in the Federal General Budget, specifically in Articles 13 and 14. The dispute revolve around the adherence to these agreements, with Baghdad arguing that the Kurdistan Region has not fulfilled its financial obligations related to oil exports and budget contributions.
FYI: Legal Disputes:
2014 Arbitration:
Iraq filed for arbitration against Turkey with the International Chamber of Commerce (ICC) in Paris, arguing that Turkey violated a 1973 pipeline agreement by allowing oil from the semi-autonomous Kurdistan Region to be exported without Baghdad's consent. This led to a significant legal battle over the rights and obligations under the pipeline transit agreemen
The pipeline from Iraq to Turkey, known as the Kirkuk-Ceyhan Oil Pipeline or the Iraq-Turkey Crude Oil Pipeline (ITP),
2023 ICC Ruling:
The ICC ruled in favor of Iraq, ordering Turkey to pay approximately $1.5 billion in damages and to suspend the loading and export of Kurdish crude oil through the pipeline. This decision was based on the premise that Turkey facilitated unauthorized exports from Kurdistan, which violated the 1973 agreement. As a result, Turkey halted oil flows through the pipeline in March 2023.
Attempts to Restart:
Negotiations and Maintenance: There have been efforts to negotiate a restart, with Turkey engaging in some maintenance activities, claiming the pipeline was damaged by earthquakes. However, as of late 2024, there's been little progress in resuming flows, largely due to the ongoing legal and financial disputes.
Iraqi Initiatives:
Iraq has also been working on repairing an alternative pipeline route, aiming to bypass the Kurdish pipeline issue and directly export oil to Turkey, which could further complicate the situation with foreign oil companies and the KRG.
The pipeline remains closed for oil transport, with ongoing discussions and legal proceedings dictating its future operation. The resumption of oil exports through this pipeline would require resolving the legal disputes, financial obligations, and reaching an agreement that satisfies all parties involved, including the KRG, Baghdad, and Turkey.
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