Turkey Presents a New Proposal to Renew and Expand the Energy Agreement with Iraq

An official at the Iraqi Ministry of Oil announced on Monday, July 21, that Turkey has submitted a draft proposal to Iraq to renew and expand the energy agreement between the two countries, extending to the areas of oil, gas, petrochemicals, and electricity. This comes after Ankara announced the termination of the Kirkuk-Ceyhan oil pipeline agreement, which has been in effect for decades.

The official confirmed that the ministry is "in the process of reviewing the draft agreement sent by the Turkish side and negotiating with them to reach a formula that serves the interests of both countries".

It is worth noting that the Kirkuk-Ceyhan pipeline, which used to transport 1.6 million barrels per day, ceased operations in 2023 after an arbitration ruling that required Turkey to pay $1.5 billion in compensation for unauthorized Iraqi oil exports between 2014 and 2018, a decision Ankara has contested.

On the other hand, a senior Turkish official told Reuters that Turkey "still desires to revive the oil pipeline with Iraq", highlighting that the pipeline has the potential to be "a highly effective and strategic pipeline for the region". He added that Turkey has heavily invested in its maintenance, emphasizing its importance for projects like the "Development Road", a joint business initiative between the two countries.

In a related context, Turkey published a decision in the official gazette on Monday, announcing the termination of the current agreement, dating back to the 1970s, and all its associated protocols, effective from July 27, 2026.

Furthermore, Ankara announced in late 2023 that the pipeline is ready to resume pumping Iraqi oil, but negotiations between Baghdad, the Kurdistan Regional Government, and independent producers have not reached an agreement on the terms.

Turkey aims to connect the "Development Road" project to extending the pipeline southward, a project for which Baghdad initially allocated funding in 2023. The plan includes building a highway and a railway extending from Basra to the Turkish border, and later to Europe.

The Turkish official concluded his statements by saying: "A new and vital phase will return to the Iraq-Turkey pipeline to the benefit of both countries and the entire region", without disclosing details of the Turkish proposals for the new agreement.