Several oil companies seek US mediation to calm tensions between Iraq and Kurdistan

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Oil companies operating in Kurdistan have asked the United States to help de-escalate tension between Iraq’s central government and the semi-autonomous region, according to three sources and a letter seen by Reuters. .

They say the intervention is necessary to ensure oil continues to flow from northern Iraq to Turkey, to prevent Turkey from having to increase oil shipments from Iran and Russia.

They also say the Kurdistan region’s economy could be at risk of collapse if it loses oil revenues.

Relations soured in February, when Iraq’s federal court ruled https://www.reuters.com/world/middle-east/iraqi-federal-court-deems-kurdish-oil-gas-law-unconstitutional-2022 -02-15/ an oil and gas law that regulated the oil industry in Iraqi Kurdistan.

Following the ruling, Iraq’s federal government, which has long opposed the Kurdistan Regional Government (KRG) being able to export oil independently, has increased its efforts to control https://www.reuters.com/article /iraq-oil-idAFL1N3010PC export earnings from Erbil, the capital of the Kurdistan region.

Prior to sentencing, Dallas-based HKN Energy wrote to the US ambassadors in Baghdad and Ankara in January seeking mediation in another case dating back to 2014 https://www.reuters.com/ article/iraq-oil-idAFL1N3010PC and that it has to do with the Iraq-Turkey oil pipeline (ITP), according to a copy of the letter seen by Reuters.

Baghdad claims that Turkey has violated the pipeline agreement by allowing Iraqi Regional Government exports, which it considers illegal, through the pipeline to the Turkish port of Ceyhan.

Turkey’s energy ministry did not respond to a request for comment.

The final hearing in the case took place in Paris in July, and the International Chamber of Commerce will issue a final decision in the coming months, Iraq’s Oil Ministry said.

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Turkey’s next steps remain unclear should the court rule in favor of Iraq, an outcome seen as likely, according to three sources directly involved.

At least one other oil company has contacted senior officials from four concerned governments directly and indirectly to seek a deal, a company representative told Reuters, speaking on condition of anonymity.

Other operators in the Kurdistan region, Genel Energy and Chevron (NYSE: CVX ), declined to comment on the arbitration case, while DNO and Gulf Keystone did not immediately respond to a request for comment.

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