The halt of oil exports from Kurdistan therefore leads to the shutdown of the northern export pipeline to the closure or reduction of oil production from several fields in the autonomous region of Kurdistan in Iraq, as shown by the statements of oil companies.
Stopping oil exports to Kurdistan: a look back at the situation
Iraq has been forced to suspend crude exports from the Kurdistan Region (KRI). This represented about 450,000 barrels per day, or half of the region’s production. Taking place through a pipeline that connects the northern oil fields of Kirkuk to the Turkish port of Ceyhan.
This suspension has contributed to a rise in oil prices in recent days, reaching nearly $80/bbl. Turkey has stopped pumping Iraqi crude into the pipeline. After Iraq won an arbitration claiming that Turkey had violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil to Ceyhan without Baghdad’s consent.
These companies forced by the cessation of oil exports from Kurdistan
Oil companies operating in the KRI are now forced to stop production or store it. Knowing that storage capacity will be reached within days, while negotiations are underway between Turkey, Baghdad and the KRG to resume exports. The Norwegian company DNO has announced the closure of its Tawke and Peshkabir oil fields. They accounted for a quarter of the Kurdish region’s total exports. Genel Energy, a partner in the fields, also said that production at Peshkabir has been suspended and deferred maintenance has been planned.
Production of Tawke has begun to be interrupted and will take about one more day. Forza Petroleum, formerly Oryx Petroleum Corp, was also forced to close its operations earlier this week. Genel Energy said its remaining assets in the KRI continue to flow into storage tanks. Production from its Sarta field can flow into storage tanks until the end of the week. While the tanks can hold Taq Taq production until about April 21, said a company spokesman. The Sarta field produced 4,710 bpd last year, while the Taq Taq field produced 4,490 bpd. Gulf Keystone also reduced production at the Shaikan oil field. He said she would suspend production after a few days.
The company did not comment on current production levels. Dallas-based HKN Energy, which operates the Sarsang block, said it would shut down operations “within a week if no resolution is found” as its storage tanks approach their maximum capacity.
Storage capacity management and shutdowns: challenges for oil companies in KRI
The block produced 43,048 bpd in the fourth quarter of last year. The suspension of oil exports from the Kurdish region has implications for the economies of Iraq and Turkey, as well as for global oil supply. Experts fear that this situation could contribute to an increase in oil prices, while tensions between the various players involved persist.
While waiting for an eventual resumption of exports, oil companies face considerable challenges, including managing storage capacity and planning for production shutdowns.
