Iraqi Kurdistan set to begin independent oil sales

09 January 2014

Two million barrels of crude to flow through Iraqi Kurdistan’s new Turkish pipeline

The semi-autonomous Kurdistan Regional Government (KRG) of Iraq has announced it will begin independent shipments of crude oil through a new pipeline to Turkey by the end of January.

Giving its first public notice of sale, the KRG’s Natural Resources Ministry says it anticipates the sale of the first parcel of 2 million barrels at the end of the month, according to a statement released on 8 January.

Shipments will increase to 4 million barrels by the end of February and then 6 million barrels by the end of March. The shipments are expected to be ramped up to as much as 10 to 12 million barrels by the end of 2014.

At this rate, exports would reach approximately 400,000 barrels a day (b/d), more than the current flows through the existing Iraq-Turkey pipeline.

Initial quantities of crude produced at the Tawke field have already flowed through the new pipeline, and will be joined by crudes from the Taq Taq field and others as they are added to the export system.

The KRG says prospective buyers can lift the crude oil shipments in the Turkish port of Ceyhan on the Mediterranean under similar arrangements used by the State Oil Marketing Organisation (Somo), a subsidiary of the federal Oil Ministry, which is responsible for Iraq’s oil sales.

“All tenders will be competitive and based on international pricing,” says the statement.

“In order to ensure full transparency of the sales and contracting process, independent observers will be invited to each tender, together with representatives of the oil companies that have produced the exported oil”.

The ministry has also invited Somo to join the process as observers.

In December, the KRG and Turkey signed a raft of agreements to allow the export of crude oil and gas directly to its northern neighbour and onto international markets. Until now, crude exports have been delivered by truck across the Iraq-Turkey border.

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