Iraq and Turkey signed an agreement on Sunday extending the operation of a major oil pipeline, which transports about a quarter of Iraqi crude exports. The extension included amendments that raised the fees payable to Turkey and which gave Iraqi crude immunity from seizure under Turkish court rulings, Iraq''s Oil Minister Hussain al-Shahristani said.
Iraq needs to rapidly boost its oil export capabilities if it wants to benefit fully from a plan to quadruple oil output. Turkey''s Energy Minister Taner Yildiz signed the agreement in Baghdad for the Turkish side.
"We are pleased to extend the agreement for 15 years at a time when Iraq is developing its oilfields to raise output to unprecedented levels, which require more export outlets," Shahristani told reporters after the signing ceremony.
The 970-km (600-mile) Kirkuk-Ceyhan pipeline carries oil from Iraq''s northern oilfields near Kirkuk to the Turkish Mediterranean port of Ceyhan. The two parties agreed to raise transit fees, Shahristani said. Another amendment to the accord included an official guarantee by the Turkish government giving it the authority to dismiss orders by Turkish courts to seize Iraqi oil, he added.
Under the renewed agreement, the pipeline''s capacity will also be upgraded by around 1 million barrels per day, Shahristani said. He gave no details on when this would happen. The double-pipe link, which first opened in 1977, has a capacity of 1.6 million bpd but normally carries about 500,000 bpd.
Iraq agreed with Turkey to renew the accord in March. The pipeline, one of Iraq''s largest crude oil export corridors, has been repeatedly attacked and has also suffered regular maintenance and technical problems.
OPEC member Iraq has signed deals with global oil firms that could boost its output capacity to 12 million bpd in six to seven years from about 2.5 million bpd now, potentially rivalling top producer Saudi Arabia.
It plans to build new oil and gas pipelines and overhaul existing ones to meet the anticipated hike in oil production. One plan involves building a pipeline through Syria.