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Shafaq News/ A website specializing in energy news confirmed today, Friday, that relations between Erbil and Baghdad are considered essential for unleashing the potential of the energy sector in Iraq, and while a government official expresses optimism that the oil and gas law will be approved by the end of this year and will open the door to investment wide, sources are downplaying this. Excessive optimism as a result of the lack of agreement “yet” with Turkey to open the Ceyhan line to export oil through it.
"Oil & Gas", a specialized oil website based in Dubai, said in a report translated by Shafaq News Agency, "Iraq is on the verge of a major transformation in its hydrocarbon industry in light of the implementation of the new oil and gas law."
The website added, "Relations between Erbil and Baghdad are considered essential for unleashing the potential of the energy sector in Iraq, especially with the approval of the energy law, which will serve as a stable road map to benefit from this sector."
The report quoted an advisor to the Iraqi Prime Minister, Mazhar Saleh, as saying, “This law will spark investments in the energy sector, and will also boost revenues,” but he stressed “the importance of parliamentary approval quickly occurring on this long-awaited law, which has been pending for about 15 years due to disputes between the provinces and with the Kurdistan Region.”
The report pointed out that "recent developments indicate that this long-awaited law will finally receive approval after the local council elections scheduled for later this year," adding that "this approval will contribute to paving the way for production-sharing agreements with foreign companies."
The report quoted Saleh, who was optimistic about this, saying that this law “will establish a stable national road map for the oil sector, and attract investments in oil and gas projects.”
The oil and gas sector represents great importance, as it contributes to the majority of Iraq's gross domestic product and its significant impact on the broader economy.
According to Saleh, this law “will establish a unified oil policy and a multilateral committee to supervise oil and gas fields, allowing Iraq to benefit from its hydrocarbon potential effectively, including in the Kurdistan Region.”
However, the report pointed out that "there is still a challenging issue, which is related to the oil pipeline between Iraq and Turkey (Ceyhan Pipeline), which had stopped working due to financial compensation disputes between the two countries."
While the report noted that “although there are expectations to resume pumping about 470,000 barrels per day after the 6-month hiatus,” it quoted a “high-ranking Iraqi source,” whose identity was not revealed, as saying that “restarting the line is not imminent.”
The report stated, “Turkey is unable to fulfill the compensation obligations required according to the ruling of the arbitration case issued by the International Chamber of Commerce, which amounts to $1.9 billion, as the judicial ruling concluded that Ankara violated its contract with Iraq through direct oil trade with the regional government from 2014.” Until 2018, while Turkey, in response, initiated legal measures on its part against Iraq, which further complicates matters.”
The report concluded by saying that “restarting the oil pipeline faces multiple challenges, including financial compensation disputes and tense relations between Erbil and Baghdad,” but stressed that “Iraq expects that the implementation of the new oil and gas law will lead to a settlement of this dispute and open great opportunities for the sector.” Oil and gas in the country.
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