Oil pipeline blown up in Kirkuk city, northern Iraq

The pipeline, local media note, would help the central government in Iraq diversify away from the autonomous region of Kurdistan, with which relations have been strained for years because of disputes regarding oil.

The Bai Hassan field, along with others in the area, was operated by the North Oil Company until 2014, when the Kurdistan Regional Government took over. Based on recent media reports, however, it seems the NOC is back in control of the field. Its reserves are estimated at 2.08 billion barrels.

Tensions between Baghdad and the KRG flared again last week, after the signing of the MoU with Iran. The Kurdish government said it had not been consulted on the pipeline construction project, suggesting it won’t go ahead without Erbil’s blessing. “It is being discussed again. But we don’t believe the talks will materialize to action, as no one has consulted the KRG,” a Kurdish government official was quoted as saying.

Earlier this year, when the OPEC production cut deal took effect, Baghdad accused Erbil of exporting more oil than it is supposed to. Oil exports from the Kurdish region have long been a point of contention with Baghdad, which claims sole authority over sales of all the country’s crude, but is unable to implement caps on Kurdish production, as the region is autonomous.

Under the OPEC deal, Iraq agreed to cut production by 200,000 bpd and is still considered by many the most likely country to cheat and not fulfill its quota of cuts because of its heavy dependence on oil revenues and the lack of control over Kurdistan production.