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Baghdad says KRG agreed to hand over crude to SOMO

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Drone attacks have cut Kurdistan oil output by half

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Iran-backed militias suspected of conducting the attacks

(Recasts on ouil export deal)

By Ahmed Rasheed

BAGHDAD, July 17 (Reuters) - Iraqi Kurdistan will resume

oil exports through a pipeline to Turkey after a two-year halt,

Iraq's federal government said on Thursday despite a fourth day

of drone attacks that have shut down half of the region's

output.

The semi-autonomous region did not confirm the export plan,

but Baghdad and Erbil have been in negotiations since late

February to end a stand-off that has halted flows from the north

of the country to Turkey's Mediterranean port of Ceyhan.

Baghdad said the Kurdistan Regional Government (KRG) will

immediately begin delivering at least 230,000 barrels per day

(bpd) to state oil marketer SOMO for export under a new

agreement approved by the federal cabinet.

The drone attacks on Iraqi Kurdistan's oilfields continued

on Thursday, with officials pointing to Iran-backed militias as

the likely source of attacks.

They are the first such attacks on oilfields in the region

and coincide with the first attacks in seven months on shipping

in the Red Sea by Iran-aligned Houthi militants in Yemen.

Thursday's strike hit an oilfield operated by Norway's DNO

in Tawke, the region's counter-terrorism service said.

It was the week's second strike on a site operated by DNO,

which operates the Tawke and Peshkabour oilfields in the Zakho

area that borders Turkey.

No group has claimed responsibility for four consecutive

days of attacks, but security officials told Reuters the drones

came from areas controlled by Iran-backed militias.

No casualties have been reported, but oil output in the

region has been cut by 140,000 bpd to 150,000 bpd, two energy

officials said.

AWAITING FINANCIAL DETAILS

A statement from KRG Prime Minister Masrour Barzani said the

government had approved a joint understanding with the federal

government and it was awaiting financial details.

Similar agreements in the past failed to secure a resumption

in exports and it remains unclear if this deal will succeed.

Oil producers working in Kurdistan, including DNO,

Genel Energy ( GEGYF ), Gulf Keystone Petroleum ( GUKYF ) and

Shamaran Petroleum ( SHASF ), did not respond immediately to

requests for comment.

They have previously demanded that their production-sharing

contracts should remain unchanged and their debts of nearly $1

billion be settled under any agreement.

The KRG was producing about 435,000 bpd before the pipeline

closure in March 2023.

The United States has been pressuring both sides to reach a

deal to resume exports.

Iran backs militant groups that are part of the Islamic

Resistance in Iraq, a collection of about 10 hardline Shi'ite

armed factions that command about 50,000 fighters and arsenals.

They have claimed responsibility for dozens of missile and

drone attacks on Israel and U.S. forces in Iraq and Syria since

the Gaza war erupted in 2023.

United States-based Hunt Oil operates the Ain Sifni oilfield

in the Dohuk region, which was attacked on Wednesday. Hunt Oil

said no workers were injured but it had to shut down its

facilities to assess damage.