The Islamic State’s advance on the Kurdistan Region spurred US action, in the form of air strikes targeting ISIS positions and vehicles. With American support from the air, Pershmerga and Iraqi Special Forces have been able to turn back the ISIS advance, and to retake the strategic Mosul Dam, among other positions. But the threat from ISIS is far from removed; Kurdish and Iraqi forces likely have months of fighting ahead of them. The unpredictable military situation has highlighted KRG’s need for a secure revenue stream, independent from Baghdad, and has thus not dampened KRG’s efforts to expand and accelerate oil production and export within the region.
This week’s news that KRG plans to double the capacity of its internal oil infrastructure, as well as the pipeline to Turkey, shows that the regional government’s commitment to oil production has not been derailed by the jihadist threat or Baghdad’s efforts to prevent the sale of Kurdish oil abroad. Though the Iraqi central government has successfully stopped one tanker full of KRG’s crude from reaching buyers in Texas, customers elsewhere are eager to take advantage of a new supplier. According to Reuters:
“Iraqi Kurdistan delivered its third major cargo of crude oil out of Ceyhan [Terminal, in Turkey] and a fourth was sailing to Croatia on Friday.
Around $350 million in oil sales have been completed or are under way from shipments sent via the KRG pipeline, a Reuters analysis of satellite tracking data shows.
One cargo of Kurdish crude aboard the United Kalavrvta tanker has been sitting off the Texas coast since late July after Baghdad asked a court to seize the vessel. The ship remains in international waters, unable to unload, while the KRG has appealed the case.
Although some foreign companies working in Kurdistan, including ExxonMobil and Chevron, have evacuated their foreign staffs, local authorities say production continues apace.
“We provide a lifeline to this region; we boost the economy. Our machines have not stopped; all our staff both expats and locals are at work. Our target is to improve production,” Onder Tekeli, general manager of Taq Taq Operating Company (TTOPCO), told Reuters during a short ride inside the facility.
It remains to be seen whether Iraq’s newly-appointed prime minister, Haider al-Abadi, will work to ease the strained relationship between Baghdad and Irbil, and steer Iraq away from Nouri al-Maliki’s legacy of domination and division. But regardless, KRG seems determined to pursue self-sufficiency and economic growth, goals toward which the announced pipeline improvements will be a significant step.
