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Do ‘ they’ need to open the old pipeline?
For a year or more we’ve been speculating about who to blame regarding the closure of a ‘long metal tube’ that transported Kurdish oil to Turkey, where much of it was exported. For the most part Iraq and Iranian influence have been seen as the main culprit. By contrast the good guys, in most of our opinions, are the International oil companies, and few Of us have blamed the Kurds. However, is it in the best interests of Kurdistan to their export oil with the proceeds going to Baghdad via SOMO. Will Baghdad support Kurdistan financially? Or will they weaponise the money and finally gain control of ‘those fu****g Kurds’ ? (They’ve hated each other for an eternity).
Could it now be the case that those that profit the most from Kurdish oil exports, the leaders lining their pockets and some ordinary people, teachers etc. that haven’t been paid in a timely manner, are the ones that are delaying the opening of the pipeline? Are Kurdistan better off with what they call “local sales” and are we, GKP, what we are given, and that doesn’t include the 150 million or so that we are owed. This being the case how long will it be before the powers that be in Kurdistan decide that trucking isn’t efficient. In short will they commission a long metal tube of their own? Will they then say “F U Baghdad.”
I don't know if you have read this piece, but it is not very positive with the prospects of the IOCs in Kurdistan. It says that Iraq could be preparing its own segment of the ITP to bypass the Kurdistan one. It also casts a shadow over the chances of success in the negotiation process: https://zerogcos.substack.com/p/pipelines-courts-and-politics-opportunities-02e
And that's the truth of the matter .
The pipeline will never open under iraq not in a million years. KRG playing the long game and that's only another 15 months to play out.
Local sales and Dividends what's not to like untill IOCs can export on their original contract terms.
SpArnada
Thanks for providing what might be an interesting article, worth a read if life wasn’t so short. Therefore I’ll assume that you are referring to the recently refurbished pipeline previously destroyed by Isis. Personally I wouldn’t stake much faith in a pipe that sends oil across northern Iraq, not when it passes / bypasses Kurdistan. Anyone can blame Isis if it springs a leak.
Re. The continued appearances of a person that has so much time to waste Itz spending it studying and commenting upon a company that Itz has no financial interest in. Nevertheless, I’ll tell Itz what’s not to like. Not making the profits that others have recently made as Itz said so often that the shares were going down from 120ish to 90 or lower. Obviously Itz didn’t buy and Itzanodividend
Sad Loser.
Remarkable article... what a tangled web... really make one wonder why anyone would want to invest in this area.
But I did... {:
The big question is what exactly happens when the contract expires in sept ‘25?
Despite the propagated rumour on here (and elsewhere) that everything is reset and will carry on where it left off last March, I have yet to see any ‘official’ comment reinforcing this.
It’s a BIG question and one that should have been asked at the AFM.
What exactly is the relevance of September 2025 for the pipeline? Would Kurdistan / Turkey then be free to resume pumping through the shut in pipeline?
Hi Vanquish,
I actually don't know the terms and conditions of the pipeline agreement which expires next year. I posed the question to our board at the AGM but it did not get mentioned.
I'd certainly like to know if there is some export via pipeline potential next year, as I'm also in the camp that it will never have a majority blessing from those in Iraq which are controlled by Iranian puppeteers.
Do you know Broadford? or anyone else.
Shouldn’t think that Ankara will be inclined to renew the contract - unless their fine from ICJ Paris is waived.
But then again - in whose interest is it to have a Pipeline which is not flowing but still charging maintenance and daily fees ?
It’s a crazy Region we are trying to do business in 🐳
Itsaponzi, you are nuts off you think the Kurds will ever again be able to export oil via any means (outside of currently "tolerated" smuggling - tolerated for now...). The whole point of the current standoff is Iraq (re)gaining sovereignty over oil production from the Kurdish region. Waiting until Sep 2025 doesn't solve anything at all.
Got to always remember Turkey has a high vested interest in getting the pipeline crude flowing. It's part ownership in some of the IOC's, charges pipeline duty, charges port tankages and shipping charges and has the ability to supply its needs directly.
It would prefer Kurdish crude to Iraqi crude any day of the week.
Expect the rivers in Iraq will be drying up fairly soon now they have 50 degrees temperatures. Not going to see a torrent of fresh cold mountain water replenish that trickling flow anytime soon now Iraq wont co-operate.
They will be more than happy to let the dam levels increase as it generates more hydro , but as for releasing a decent flow anytime soon...forget it.
Hi belgrano,
I have the pipeline agreement - at least the one which was put into the public domain.
What sort of info are you seeking?
BroadfordBay - does the agreement end Sep 25?
And is there anything in it that would preclude the IRG having a say in it post Sep 25?
I appreciate that you aren't a contract lawyer (or maybe you are?!?!?)
Hi Broadford,
Appreciate your advice,
Know a lot of investors are hoping that any new agreement could be worded or achieved outside of SOMO control. Clearly many in Kurdistan are pressing for independence from Baghdad, and independent income streams from pumped exported crude could certainly be a keystone. Is it a requirement in the current contract that Baghdad has to have a say, which could be removed in a new contract with direct agreement from a self autonomous Kurdistan.
I believe Baghdad has many in power actively trying to undermine Kurdistan due to hatred on religious grounds and will always conjure excuses to prevent the pipeline opening. Just that a new contract might circumnavigate them completly.
I posted the following on 19th Mar-24, under the title: ITP Pipeline Agreemnt 19th Sept 2010.
Consider the potential implications of Article 11 of this sovereign agreement:
"...This Amendment shall be valid for 15 years as from entering into force. The Sides start negotiating the contract conditions upon request of any of the Sides two years before its termination date. In the case where there is no need for new amendment/agreement this Amendment shall be considered as extended for an additional 5 years period of time, unless a termination note is sent in writing by one of the two Sides to the other 1 (one) year before the expiration date of this agreement".
(Copied from the agreement exactly as written)
You can find the agreement if you Google "ITP Pipeline Agreement", in my case it's the third result from jurismundi. It was filed on 04/10/23
Notice that the document was signed between the Government of the Republic of Iraq and the Government of the Republic of Turkey, not the KRG. That is the origin of the dispute (the ITP no shipping Iraqi oil but Kurdish oil instead) that has resulted in damages of $600 million in favour of Iraq, with an additional amount from 2019 to 2023. I don't think that document can be applied to the situation of the IOCs.