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Iraqi Kurds announce start of crude flow to Turkey

January 9, 2014

BAGHDAD (AP) — Iraq’s self-ruled northern Kurdish region says it has unilaterally started sending its crude to Turkey and is going ahead with plans to export oil despite objections by the central government in Baghdad.

According to a statement late Wednesday by the Kurds’ regional Natural Resources Ministry, the flow of oil to Turkey started in early January. The oil is being shipped north through a newly constructed pipeline to the Turkish port of Ceyhan, bypassing Baghdad.

The Arab-led government in Baghdad and the ethnic Kurds in the country’s north have been locked in a long-running dispute over who is in charge of the country’s oil and who has the rights to develop Iraq natural resources, based on different interpretations of the 2005 constitution.

Baghdad insists it has the sole right to draw plans, award deals to developers and export crude on the international market. Meanwhile, Kurds argue that the constitution allows their regional government to do so as well.

Since the 2003 U.S.-led invasion, the Kurds have unilaterally signed dozens of oil deals with foreign energy companies to tap their vast oil and gas resources, without going through Baghdad. The Iraqi government in Baghdad maintains that all those deals are illegal. The oil dispute is part of bigger one involving territory and the allocation of money.

The Iraqi Kurdish ministry has also invited companies to participate in a tender later in January for the 2 million barrels already deposited in Ceyhan. It anticipates an increase in exports to 4 million barrels in February and 6 million barrels in March, with the goal of exporting 10-12 million barrels in December.

Officials in Baghdad were not immediately available for comment on Thursday. But last month, Iraq’s Deputy Prime Minister Hussain al-Shahristani, who is in charge of the energy sector, warned that Baghdad would deprive the Kurds of their 17 percent share in the national budget if they go ahead with the exports without the government’s approval.

For its part, Turkey has been reluctant to get involved in Iraq’s internal oil dispute but there have been reports Ankara would not allow the exports without Baghdad’s OK. Turkish officials could not immediately be reached for comment on Thursday.

The latest developments come as Iraq’s Shiite-led government is waging a battle against a stubborn Sunni-led insurgency. Al-Qaida-linked militants, known as the Islamic State of Iraq and the Levant, have made major gains since late December in the western province of Anbar, making it the most serious challenge since the departure of American forces in late 2011.

Iraq has also been struggling to develop its oil and gas reserves after years of war, international sanctions and neglect. Foreign companies were hesitant to come in after 2003, due to the deteriorated security situation. But since 2008, when the situation started to improve, Iraq has awarded more than a dozen oil and gas deals to international energy companies such as U.S. Exxon Mobil, UK’s BP, France’s Total and others.

Since then, daily oil production increased from around 2.4 million barrels a day to more than 3 million barrels a day now, and exports went up from less than 2 million barrels a day to 2.4 million barrels a day at present.

Kurdish officials claim their region holds 45 billion barrels, though that figure cannot be confirmed independently. The Iraqi Kurds have said they plan to produce one million barrels per day by 2015 and two million barrels per day in 2019.


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