The delayed project to swap Kirkuk crude oil in the neighboring Iraq to Iran is expected to be launched later this month, the secretary-general of Iran-Iraq Chamber of Commerce said on Friday.
“In the closing months of the last fiscal year [ended March 20], rumors circulated that the Kurdistan Regional Government had reached an agreement with the central government in Baghdad on resuming oil export from Kirkuk via the old route (Kirkuk-Ceyhan). Hence, oil swap operations with Iran stopped,” Seyyed Hamid Hosseini was also quoted as saying by ISNA.
Rejecting the rumors, Hosseini noted that in line with the First Vice president Es’haq Jahangiri’s recent visit to Baghdad, accompanied by Iranian oil officials, Iraq asserted that it is committed to the bilateral agreements, including laying a pipeline for swapping Kirkuk oil and importing natural gas from Iran.
Following Kurdistan’s independence referendum last year, 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.
Hosseini added that the pipeline should either pass through two Iraqi cities to reach Darreh Shahr in Ilam Province or pass the northern city of Sulaymaniyah in Iraq.
He stressed that implementing the project is complicated, as the final route of the pipeline is yet to be determined. On the other hand, oil transportation also faces problems, such as lack of facilities on the Iranian side of the border.
“The Iraqi side has consistently put off the start of swapping operations. However, I think it will be commenced in late April,” he said.
"We can also provide them with engineering services to complete their energy and power projects in return for transferring crude to Iran."
The official had previously 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.
According to Hosseini, another plan to transfer oil from Kirkuk's fields to Iran is by trucks, which cannot be fully implemented at this stage due to security concerns.
Iraq and Iran have reportedly agreed to swap up to 60,000 barrels per day of crude produced from Kirkuk for Iranian oil to be delivered to southern Iraq, CNBC reported.
About 30,000 barrels per day of crude are to be delivered to Iran's Kermanshah Refinery in the first stage.
