Kurds highlight discrepancy in Iraq oil figures

20 March 2012

KRG asks Baghdad to investigate missing 35,000 b/d of crude oil exports

The Kurdistan Regional Government (KRG) of northern Iraq has requested Baghdad officials investigate an estimated 35,000 barrels a day (b/d) of crude oil exports which it says is missing from the country’s national total exports.

Oil exports from the Kurdistan Region in Iraq have averaged between 90,000-100,000 b/d so far this year, from the Taq-Taq, Tawke, Khormor and Khurmala oil fields, says the KRG in a 16 March statement.

However, the figure conflicts with statements from the Oil Ministry in Baghdad, which has repeatedly put the semi-autonomous region’s oil exports at only 65,000 b/d.

“If the Oil Ministry’s claims are correct, this means that between 25,000-35,000 b/d are being lost in the process of Somo (the State Oil Marketing Organisation) receiving oil from the KRG and taking it to market,” says the statement.

The KRG calls on the Oil Ministry to investigate the problem “in case somebody is creaming off the difference between the oil received and the oil sold”.

The issue of lost barrels was a source of some tension between the KRG and Baghdad during 2011, although it has never been resolved. Why the Kurdish authorities have chosen to reignite the issue is unclear, but speculation suggest it may be connected to power sharing negotiations between the two governments.

The KRG has also highlighted another issue with Baghdad. The KRG has signed more than 40 production sharing contracts with international oil companies to explore and develop the region’s oil and gas reserves. The KRG has an agreement with the federal government to pay the companies’ costs. However, no payment has been made by the federal government since May 2011, according to the KRG, and the bill now amounts to more than $1bn. The KRG also says it has not received any remuneration for its exports in 2012.

The Kurdish argument has been backed up by the Iraqi parliament’s Oil and Energy committee, which says Kurdish production has been reduced because Baghdad is yet to pay its outstanding debts.

The Oil Ministry reported its crude oil exports for January at an average of 2.11 million b/d, with 1.71 million b/d shipped from Basra in the south and 393,000 b/d from the northern export pipeline to Turkey.

Current exports are plumbed into the main Iraq-Turkey pipeline, making production increases from the Kurdish fields difficult. But the KRG plans to build a series of pipelines to transport more oil up to the main export terminal at Fish Khabur, by the Turkish border, increasing the region’s options for exporting its own crude independently of Somo and Baghdad.

The first of these is the $400m Kurdistan Iraq Crude Export (KICE) with UK-Turkish firm Genel Energy, which will take 423,000 b/d crude from the Taq Taq field.

> Iraq crude oil production figures

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