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Türkiye has submitted a draft proposal to Iraq to renew and broaden an energy agreement between the two countries to cover cooperation in oil, gas, petrochemicals and electricity, an Iraqi Oil Ministry official said late Monday.
The statement came after Ankara announced the end of a decades-old agreement covering the Kirkuk-Ceyhan oil pipeline.
“The Ministry of Oil is in the process of reviewing the draft agreement sent by the Turkish side and negotiating with them regarding it to reach a formula that serves the interests of Iraq and Türkiye,” the Iraqi official told the state news agency.
The 1.6 million barrels per day (bpd) Kirkuk-Ceyhan pipeline has been offline since 2023 following an arbitration ruling by the International Chamber of Commerce (ICC) that Türkiye is appealing.
Türkiye still wants to revive the oil pipeline with Iraq, a senior Turkish official told Reuters earlier on Monday.
In a decision published in its Official Gazette on Monday, Türkiye said the existing deal dating back to the 1970s – the Türkiye-Iraq Crude Oil Pipeline Agreement – and all subsequent protocols or memoranda would be halted from July 27, 2026.
The ICC had ordered Ankara to pay Baghdad damages of $1.5 billion over what it said were unauthorized exports by Iraq’s Kurdistan Regional Government (KRG) between 2014 and 2018.
Türkiye, on the other hand, said the ICC had recognized most of Ankara’s demands.
Since then, Iraq and Türkiye have been working to resume oil flows from the pipeline.
Ankara said in late 2023 that the pipeline was ready to receive Iraq’s oil, but talks between Baghdad, Iraq’s Kurdistan Regional Government (KRG) and independent oil producers were not able to reach an agreement on terms.
The Turkish official said the pipeline had the potential to become a “highly active and strategic pipeline for the region.”
The person added that Türkiye had invested heavily in its maintenance, and noted its importance for regional projects like the Development Road – a planned trade route involving Türkiye and Iraq.
“A new and vibrant phase for the Iraq-Türkiye pipeline will benefit both countries and the region as a whole,” the Turkish official said, without giving details of what Ankara wanted the new agreement to include.
Türkiye sees the Development Road initiative – a high-speed road and rail link, running from Iraq’s port city of Basrah on the Gulf to the Turkish border and later to Europe – as an opportunity to extend the pipeline further south. Baghdad allocated initial funding for the project in 2023.
Türkiye’s announcement came days after half of KRG’s oil production was shut down by half after oil fields in the region were targeted by drone attacks for four days.
Officials pointed to Iran-backed militias as the likely source of the attacks, although no group has claimed responsibility.
They were the first such attacks on oil fields in the region and coincided with the first attacks in seven months on shipping in the Red Sea by Iran-aligned Houthi rebels in Yemen.
Despite the attacks, Baghdad last week said oil exports would resume from KRG, while the region said a restart was not imminent.
The KRG was producing about 435,000 bpd before the pipeline closure.
Baghdad and the companies have not yet agreed how to restart the exports, a KRG government source said, while a source at Türkiye’s Ceyhan said there was also no preparation at the terminal for a restart of flows.
On Thursday, a statement from KRG Prime Minister Masrour Barzani said the government had approved a joint understanding with the federal Iraqi government and it was awaiting financial details.
Similar agreements in the past failed to secure a resumption in exports and it remains unclear if this deal will succeed.
Oil companies working in Iraq’s KRG have previously demanded that their production-sharing contracts should remain unchanged and that their debts of nearly $1 billion be settled under any agreement.
