Iran Could Replace Ceyhan for Kirkuk Oil

Iran can provide Iraq with engineering services in return for crude supply.Iran can provide Iraq with engineering services in return for crude supply.

Negotiations are underway between Tehran and Baghdad to transfer crude oil from Kirkuk fields to Iran instead of sending it to the Turkish city of Ceyhan under a possible swap agreement or in return for Iran's engineering services, secretary-general of Iran-Iraq Chamber of Commerce said.

"Should the Kurdistan Regional Government fail to reach an agreement with the central government in Baghdad on oil export policy, the transfer of Kirkuk crude to Iran will be feasible," Hamid Hosseini was also quoted as saying by ISNA on Monday.

Following Kurdistan’s independence vote, Baghdad has taken steps to bring oil exports under federal authority, calling on other countries to deal exclusively with the central government regarding oil sales.

Pointing to the old pipeline that exported Kirkuk oil to Turkey, Hosseini said, "The Kirkuk Ceyhan pipeline crosses territory taken by Islamic State militants in 2014 and recaptured by US-backed Iraqi forces over the past two years. The pipeline is in dire need of rehabilitation."

According to the official, comprehensive surveys are being conducted to check whether it is financially and technically feasible to transfer Iraq's crude to Iran.

"If crude transfer venture from Kirkuk is launched, close to 650,000 barrels of oil can be delivered to Iran per day," Hosseini said, adding that it is very likely that a pipeline be laid to send oil from Basra to Abadan and the same amount will be swapped from one of Iranian oil terminals, namely Kharg in the Persian Gulf.

"We can also provide them with engineering services to complete their energy and power projects in return for transferring crude to Iran," he said.

The official said that although the two states are rivals in the global oil market, they can collaborate in oil projects as they share a large number of massive hydrocarbon reserves, namely Azadegan, Yaran, Yadavaran, Azar, Dehloran, West Paydar and Naft-Shahr.

"Unlike Iranian oilfields that are mostly offshore, Iraqi fields are located onshore," he said, noting that they do not require huge investment for development and can be expanded by a single contractor if the two sides reach an agreement.

According to Oil Minister Bijan Namdar Zanganeh, negotiations are underway with Iraq to develop three joint oilfields.

“As soon as talks produce the desired results, on the basis of a master plan, the oilfields in Kermanshah and Khuzestan provinces will be developed by one contractor,” Zanganeh said.

Energy experts, including Hosseini, believe that using a single contractor to implement the plan can help the two states cut unnecessary expenses.

Highlighting Iranian companies' capacity to transfer know-how to Iraq, Hosseini noted that Iran can provide Iraq with oil equipment, training and drilling services.

  Drilling Cooperation

In a meeting between a delegation of senior executives from Iraq's National Oil Company

headed by officials from Iraq's Zigar Oil Company and the National Iranian Drilling Company in Ahvaz on Monday, the two sides discussed cooperation in undertaking drilling ventures in Iraq.

"The two firms have reached a preliminary agreement to establish NIDC 's presence in developing Iraqi oilfields," Saeed Heidarian, an NIDC official said, adding that playing an active role in Iraqi oil projects and gaining a foothold in the Iraqi drilling market always topped NIDC's agenda.

According to Heidarian, the state-owned NIDC—a subsidiary of the National Iranian Oil Company—is in charge of all offshore and onshore drilling activities. The company’s services include well logging, cementing and acidizing, drill stem test, well testing, training, development and general services. 

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