By Muhammed Hadi

ERBIL, Kurdistan Region – Why did Baghdad agree to exporting Kirkuk oil via the Kurdistan Region? And what will happen if the oil fields produce more than the amount agreed?

The Kirkuk oil fields, which produce 400,000-500,000 barrels per day (bpd) have caused much controversy amid the Baghdad-Erbil oil and budget agreement.

The deal stipulates that Erbil must export 550,000 bpd to the Ceyhan port through the Kurdistan-Turkey pipelines. Of this, 250,000 bpd will come from the Kurdistan Region’s own oil fields, and the remaining 300,000 are to come from the Bai Hassan, Havana, and Dubis fields in Kirkuk province. The exports will be overseen by the Iraqi oil marketing company, SOMO.

In Iraq, crude was first discovered at the Babagurgur field in Kirkuk in 1927, and production started seven years later. By the time of the US invasion in 2003, Kirkuk province was producing one million barrels of oil per day. The province is home to a number of large fields, including the Kirkuk oil field, which contains 150 oil wells and a reserve of 8 billion barrels of oil. The Bai Hassan field, located in the west of Dubis sub-district, Havana, Jamboor and a number of other oil fields are all located in the province.

According to the latest data, Kirkuk is home to at least 12 billion barrels of reserve oil. The Iraqi North Oil Company claims the reserve is much higher, estimating them at between 20 to 25 billion barrels.

The Kirkuk oil fields currently can produce 400,000-500,000 bpd. However, upon completion of the current renovation projects by BP and the linking of the Kirkuk pipelines to the Kurdistan-Turkey pipeline, the capacity will rise to 700,000 bdp, according to Ali Salayee, the head of the Energy Committee in the Kirkuk Provincial Council.

He maintains that within a year capacity of the fields will exceed one million bpd.

Formerly, the Kirkuk oil fields were providing 280,000 bpd to the Beiji refinery, for domestic consumption in 11 Iraqi provinces.

Some of the oil wells in the Hawija and Hamreen districts of Kirkuk are currently under the control of the Islamic State (ISIS). A number of the oil fields in the southern part of the province have been disabled due to ISIS attacks on the pipelines.

Regarding the recent agreement, Dilshad Shaaban, deputy director of the Kurdistan parliament’s Energy Commission, told Rudaw that according to the agreement only 300,000 bpd from the Kirkuk oil will “be for the Iraqi government.”

According to Shaaban, the agreement requires the Kurdistan Region to deliver 550,000 bpd from January 1, 2015 to the end of 2015 to SOMO. The oil will be under the control of the Kurdistan Regional Government (KRG) until it leaves Kurdistan borders, after which it will become the property of the Iraqi government.

“Three hundred thousand barrels per day from Kirkuk oil will be delivered to the Iraqi government. After this amount, whatever more oil is produced will be the Kurdistan Region’s oil” Shaaban said. “Now, there is no difference between Zakho or Kirkuk oil, they are both under the control of the KRG.”

A source from the Kurdistan Natural Resources Ministry told Rudaw that the KRG completed the linkage of the Kirkuk pipelines to the Kurdistan pipelines last month. As for the 300,000 bpd from Kirkuk, all come from the Bai Hassan oil field, according to the source.

The source also added that much of the work of linking the Zummar, Ain Zalla and the Rabiya oil fields to Kurdistan pipelines has been completed.

Rudaw