The Kurdish group that controls Iraq's Kirkuk oilfields has agreed with Baghdad to keep crude flowing from the region through a pipeline to a Turkish export terminal on the Mediterranean, a Kurdish official told Reuters on Wednesday. Kosrat Rasul said the deal was reached on Tuesday between his group, the Patriotic Union of Kurdistan (PUK), and Iraqi Prime Minister Haider al-Abadi.
The pipeline carries 150,000 barrels per day (bpd) of Kirkuk crude for export to world markets via Ceyhan, in Turkey. The PUK withdrew its threat to shut the pipeline after the Iraqi government decided to increase further the capacity of the Kirkuk oil refinery, a Kurdish source close to the talks said. The oil ministry in Baghdad announced on Wednesday that an additional processing unit of 10,000 bpd had begun operating, boosting the plant's capacity to 40,000 bpd.
Another unit, also with a capacity of 10,000 bpd, should come on stream before the year-end, said a ministry statement, citing a message from oil minister Jabar al-Luaibi to Abadi. The source said the additional output would improve fuel distribution in the PUK-held regions of Kirkuk and Sulaimaniya and create jobs for locals. "The agreement ended the problem and there is no deadline anymore" to shut the pipeline, said Rasul, who is the PUK deputy secretary-general, giving no further details.