Iraq and Iran sign Kirkuk oil swap deal

Iraq has agreed to swap up to 60,000 barrels per day of crude produced from the northern Iraqi Kirkuk oilfield for Iranian oil, Iraqi Oil Minister Jabar al-Luaibi has said.

The agreement signed by the two countries provides for Iran to deliver to Iraq's southern ports, on the Gulf, "oil of the same characteristics and in the same quantities" as those it would receive from Kirkuk, Luaibi said in a statement on Dec. 9.

The deal in effect allows Iraq to resume sales of Kirkuk crude, which have been halted since Iraqi forces took back control of the fields from the Kurdistan Regional Government (KRG) in October.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery, Luaibi said.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude, he said.

The pipeline could replace the existing export route from Kirkuk via Turkey and the Mediterranean by pipeline.

The autonomous KRG forces took control of Kirkuk in 2014, when the Iraqi army collapsed in the face of Islamic State of Iraq and the Levant (ISIL), preventing the region's oilfields from falling into the hands of the militants.

Russian Energy Minister Alexander Novak did not discuss operations by Russian oil companies on the KRG soil with the Iraqi prime minister or oil minister during his trip to Iraq, the Iraqi oil ministry said on Dec. 7.

"At a time when the oil ministry welcomes all international oil companies to invest and work in Iraq, it also affirms that oil is a sovereign resource, and therefore all contracts ... should be signed with the federal government and the oil ministry," it said in a statement.

"Anything contrary to that means these entities are liable for all the consequences, legal and financial responsibilities, and damages resulting from that."

Novak had tweeted on Dec. 6 that the government of Iraq had no objections regarding operations by Russian oil companies in the semi-autonomous KRG region of northern Iraq.