Erbil defends independent oil export policy

20 January 2013

Crude oil and condensates have been exported in trucks to Turkey

The Kurdistan Regional Government (KRG) has defended the independent crude oil exports by an international oil company from its territory in the north of Iraq to Turkey.

In a statement on 17, the KRG confirmed that is has entered into a barter arrangement with Turkey, trading crude oil, condensates and fuel oil for refined products such as diesel, kerosene and benzene.

The exports, which are transported by across the border instead of through the main Iraq-Turkey pipeline and the Oil Ministry’s State Oil Marketing Organisation (Somo), take place because “Baghdad does not supply the Region with its entitlement to refined products”.

Genel said on 18 January that it had received permission from the KRG to export crude from the Taq Taq field by truck to Turkey. The company expects volumes to around 20,000 barrels a day (b/d) over the next six to eight weeks.

The unusually lengthy statement attacked Iraq’s federal authorities, slamming them for ““The mismanagement of oil and gas resources by the federal authority and its lack of respect for the constitution and the many agreements it has signed”.

It came as a response to an interview given by Oil Minister Abdulkarim al-Luaibi to Reuters news agency, in which he threatened legal action against UK-Turkish joint venture Genel Energy for “smuggling”, and also warned of cuts to the KRG’s federal budget.

Current exports from the Kurdish region are plumbed into the main Iraq-Turkey pipeline, but the KRG plans to build a series of pipelines to transport more oil up to the main export terminal at Fish Khabour, by the Turkish border, increasing the region’s options for exporting its own crude independently of State Oil Marketing Organisation (Somo) and Baghdad.

Genel Energy is pursuing plans to build a 1 million b/d pipeline from its producing fields to the Turkish border by the end of the year.

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