Turkey submits draft proposal to Iraq to renew, expand energy agreement

Turkey has submitted a draft proposal to Iraq to renew and expand an energy agreement between the two countries to include cooperation in oil, gas, petrochemicals and electricity, an Iraqi oil ministry official told the state news agency.

The statement came after Ankara announced the end of a decades-old agreement covering the Kirkuk-Ceyhan oil pipeline.

"The Ministry of Oil is in the process of reviewing the draft agreement sent by the Turkish side and negotiating with them regarding it to reach a formula that serves the interests of Iraq and Turkey", the Iraqi oil ministry official added.

The 1.6 million barrel-per-day Kirkuk-Ceyhan pipeline has been offline since 2023 after an arbitration court ruled Ankara should pay $1.5 billion in damages for unauthorised Iraqi exports between 2014 and 2018. Turkey is appealing the ruling.

Turkey still wants to revive the oil pipeline with Iraq, a senior Turkish official told Reuters earlier on Monday.

In a decision published in its Official Gazette on Monday, Turkey said the existing deal dating back to the 1970s - the Turkey-Iraq Crude Oil Pipeline Agreement - and all subsequent protocols or memorandums would be halted from July 27, 2026.

Iraq and Turkey have been working to resume oil flows from the pipeline. Ankara said in late 2023 that the pipeline was ready to receive Iraq's oil but talks between Baghdad, Iraq's Kurdistan Regional Government and independent oil producers were not able to reach an agreement on terms.

The Turkish official said the pipeline had the potential to become a "highly active and strategic pipeline for the region".

The person added that Turkey had invested heavily in its maintenance, and noted its importance for regional projects like the Development Road - a planned trade route involving Turkey and Iraq.

"A new and vibrant phase for the Iraq-Turkey pipeline will benefit both countries and the region as a whole," the Turkish official said, without giving details of what Ankara wanted the new agreement to include.

Turkey sees the Development Road initiative - a high-speed road and rail link, running from Iraq's port city of Basrah on the Gulf to the Turkish border and later to Europe - as an opportunity to extend the pipeline further south. Baghdad allocated initial funding for the project in 2023.