Turkiye seeks to overturn ICC ruling on Iraq pipeline exports: Official
The Turkish energy minister claimed that the Iraq-Turkiye pipeline is undergoing maintenance work, and will be ‘technically’ ready to resume operations soon
Turkiye has appealed to the International Chamber of Commerce (ICC) against Iraq to overturn the arbitration demanding that Ankara pay damages over its illegal oil imports from the Iraqi Kurdistan region, a Turkish official said on 14 September.
“We are saying that we can have an amicable solution for this issue, but the Iraqi side continues to take legal action. But from the legal perspective, we need to control and we need to take care of our own interests. We will file in Paris court for a set-aside case,” Alparslan Bayraktar, Turkiye’s Energy Minister, told media.
For years, Kurdish authorities gained billions of dollars in cash by exporting crude oil to Turkiye without the approval of the Iraqi federal government
In late March, Ankara halted the flow of oil through the Iraq-Turkiye pipeline after an arbitration ruling from the ICC in favor of the government in Baghdad over these illegal oil exports made by the Kurdistan Regional Government (KRG) to Turkiye.
The ICC had ruled that Turkiye was violating a 1973 pipeline transit agreement between Baghdad and Ankara and was ordered to pay Iraq $1.5 billion in damages for exports between 2014 and 2018. A second arbitration suit covering exports between 2018 and to date is ongoing.
Ankara has requested that Baghdad suspend the separate case regarding the period after 2018.
While Iraq was awarded $1.9 billion in the suit, Turkiye was also awarded $500 million over its counterclaims of low capacity at the Iraq-Turkiye pipeline, as well as unpaid transportation fees dating back decades. Last week, Ankara argued that Iraq must pay $956 million in damages following calculations it made.
The Turkish appeal states that Ankara sent a letter to Baghdad in late August demanding the payment be made as soon as possible. According to the appeal, Iraq did not respond.
The pipeline has remained shut, with Turkiye claiming that it sustained significant damages as a result of the February earthquake.
“It was a warning signal for us. So, we said, like, 'We need to check everything, we have already checked the Ceyhan facility for storage tanks and also loading operations, but we decided to check all the pipeline, 650 kilometers, two pipelines, all the way from [Iraq] to Ceyhan,” Bayraktar said.
He added that independent inspections are taking place, and that Turkiye is preparing a report in case Iraq decides in the future to sue for the halt of oil flow.
“As of today, the independent surveyor completed their survey, and now they’re preparing their report,” the minister went on to say.
The two countries have been negotiating to end the dispute, and have reportedly agreed to wait until maintenance work on the pipeline has been completed.
Bayraktar also said on 14 September that the northern oil export route will soon be “technically” ready to resume operations.
Many have speculated that Turkiye seeks to use oil negotiations as leverage against Baghdad, including regarding water resources from the Euphrates River and Turkiye’s military presence in Sinjar and the Kurdistan region.