In a separate statement on Thursday, the KRG said that both its Ministry of Natural Resources and Iraq's Ministry of Oil "are reportedly waiting for Turkey's response before resuming oil exports." Iraq made its request to Turkish state energy company BOTAS after traders buying crude from the Kurdistan region signed contracts with Iraq's state-owned crude marketer SOMO on Tuesday and Wednesday following weeks of discussions, according to four sources familiar with the matter. The statement from Iraq's oil ministry confirmed SOMO's contracts with international oil firms have been signed.
Turkey's energy ministry did not immediately respond to requests for comment. Iraq put off asking Turkey to resume flows as it spent weeks resolving various issues with the KRG on a restart deal. The KRG has agreed for SOMO to market its crude oil. Its export revenue will be deposited in an existing KRG bank account with Citi in the United Arab Emirates, according to three sources familiar with the matter. Baghdad will have auditing access, Reuters previously reported. SOMO also had to iron out contracts with buyers of KRG crude. The newly signed contracts are for a period of up to three months but do not address the vast amount of debt that the KRG owes trading firms, one of the three sources said. Producers in the region have called for the KRG to prioritise debt repayment, making transparency and regularity of payments conditions for new investments and maximum export flows once the pipeline reopens, a separate industry source said. The timing of the pipeline restart, however, remains uncertain.
Turkey is seeking negotiations relating to the damages it was ordered to pay in the arbitration case, and wants permanent resolution of open arbitration issues before resuming flows, sources previously told Reuters. "There are a number of considerations and one of the important (ones) is presidential elections in Turkey on May 14 with a possible run off," Bijan Mossavar-Rahmani, executive chairman of Norwegian oil company DNO, told a call with analysts on Thursday. (Reporting by Rowena Edwards and Ron Bousso in London, Julia Payne in Brussels, Ahmed Rasheed in Baghdad, and Nerijus Adomaitis in Oslo; Additional reporting by Can Sezer in Istanbul; Editing by Mark Potter, Kirsten Donovan and Grant McCool)
